Investment Calculation

Sheet2

What is the Sharpe ratio, Treynor ratio, and Jensen’s alpha for each portfolio? (Negative values should be indicated by a minus sign. Leave no cells blank – be certain to enter “0” wherever required. Do not round intermediate calculations. Round your Sharpe ratio answers and Treynor ratio answers to 5 decimal places and Jensen’s alpha answers to 2 decimal places. Omit the “%” sign in your response.)
  Portfolio RP σP βP Portfolio Sharpe Ratio Treynor Ratio Jensen’s Alpha Cannot figure out the Treynor Jensen’s or Market
  X 16.5 % 37 % 1.40 X  %
  Y 15.5 32 1.15 Y  %
  Z 7.4 22 .70 Z  %
  Market 11.8 27 1.00 Market  %
  Risk-free 5.2 0 0

Sheet3

A stock has an annual return of 13 percent and a standard deviation of 61 percent. What is the smallest expected loss over the next year with a probability of 5 percent? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the “%” sign in your response.)
  Smallest expected loss   %

Sheet4

A stock has an annual return of 10.4 percent and a standard deviation of 41 percent. What is the smallest expected gain over the next year with a probability of 1 percent? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the “%” sign in your response.)
  Smallest expected gain  %

Sheet5

Problem 13-19
Consider the following information for a mutual fund, the market index, and the risk-free rate. You also know that the return correlation between the fund and the market is .97.
Year Fund Market Risk-Free
2008 –20.60 % –39.5 % 1 %
2009 25.1 21 3
2010 13.9 13.9 2
2011 7.6 8.8 4
2012 –2.10 –5.2 2
What are the Sharpe and Treynor ratios for the fund? (Do not round intermediate calculations. Round your answers to 4 decimal places.)
  Sharpe ratio Need answer
  Treynor ratio Need answer

Sheet6

Problem 13-20
Consider the following information for a mutual fund, the market index, and the risk-free rate. You also know that the return correlation between the fund and the market is .95.
Year Fund Market Risk-Free
2008 –19.40 % –37.5 % 1 %
2009 25.1 20.8 4
2010 13.7 13.3 2
2011 7.2 8.4 6
2012 –1.98 –4.2 2
Calculate Jensen’s alpha for the fund, as well as its information ratio. (Do not round intermediate calculations. Round your Jensen’s alpha answer to 2 decimal places and Information ratio answer to 4 decimal places. Omit the “%” sign in your response.)
  Jensen’s alpha  % Need Answer
  Information ratio Need Answer

Sheet7

Problem 17-3
You are given the following information for Smashville, Inc.
  Cost of goods sold: $ 234,000
  Investment income: $ 2,600
  Net sales: $ 397,000
  Operating expense: $ 92,000
  Interest expense: $ 7,400
  Dividends: $ 12,000
  Tax rate: 40 %
  Current liabilities: $ 20,000
  Cash: $ 21,000
  Long-term debt: $ 22,000
  Other assets: $ 42,000
  Fixed assets: $ 131,000
  Other liabilities: $ 5,000
  Investments: $ 46,000
  Operating assets: $ 47,000
Calculate the gross margin, the operating margin, return on assets, and return on equity. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the “%” sign in your response.)
  Gross margin  %
  Operating margin  %
  Return on assets  % Cannot figure this one out?
  Return on equity  % Cannot figure this one out?

Sheet8

Problem 17-6
The most recent financial statements for Bradley, Inc., are shown here (assuming no income taxes):
Income Statement
  Sales $ 6,400
  Costs (4,480 )
  Net income $ 1,920
Balance Sheet
  Assets $ 19,200 Debt $ 9,900
Equity 9,300
  Total $ 19,200 Total $ 19,200
Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year’s sales are projected to be $7,808. What is the external financing needed? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest whole dollar. Omit the “$” sign in your response.)
  EFN $
Cannot figure out EFN?

Sheet9

Problem 17-11
The most recent financial statements for Martin, Inc., are shown here:
Income Statement
  Sales $ 29,500
  Costs -18,000
  Taxable income $ 11,500
  Taxes (34%) -3,910
Net income $ 7,590
Balance Sheet
  Assets $ 82,600 Debt $ 30,000
Equity 52,600
Total $ 82,600 Total $82,600
Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1,165 was paid, and Martin wishes to maintain a constant payout ratio. Next year’s sales are projected to be $33,630. What is the external financing needed? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the “$” sign in your response.)
  EFN $
Cannot figure out EFN?

Sheet10

Problem 17-14
Amounts are in thousands of dollars (except number of shares and price per share):
Kiwi Fruit Company Balance Sheet
  Cash and equivalents $ 480
  Operating assets 760
  Property, plant, and equipment 3,000
  Other assets 165
  Total assets $ 4,405
  Current liabilities $ 980
  Long-term debt 1,375
  Other liabilities 175
  Total liabilities $ 2,530
  Paid in capital $ 395
  Retained earnings 1,480
  Total equity $ 1,875
  Total liabilities and equity $ 4,405
Kiwi Fruit Company Income Statement
  Net sales $ 6,700
  Cost of goods sold (4,900 )
  Gross profit $ 1,800
  Operating expense (530 )
  Operating income $ 1,270
  Other income 160
  Net interest expense (200 )
  Pretax income $ 1,230
  Income tax (250 )
  Net income $ 980
  Earnings per share $ 1
  Shares outstanding 980,000
  Recent price $ 43.5
Kiwi Fruit Company Cash Flow Statement
  Net income $ 980
  Depreciation and amortization 220
  Increase in operating assets (100 )
  Decrease in current liabilities (112 )
  Operating cash flow $ 988
  Net (purchase) sale of property $ 200
  Increase in other assets (73 )
  Investing cash flow $ 127
  Net (redemption) issuance of LTD $ (168 )
  Dividends paid (182 )
  Financing cash flow $ (350 )
  Net cash increase $ 765
Calculate the price-book, price-earnings, and price-cash flow ratios for Kiwi Fruit. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
  Price-book ratio Need Answer
  Price-earnings ratio Need Answer
  Price-cash flow ratio Need Answer

 

0.10

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0.10

 

0.32

 

0.32

 

0.30540

 

0.30540

 

 

17.88

 

17.88

 

41.06

 

41.06

 

0

 

0