An investor wants to generate a portfolio with an expected return of 8.5% p.a. and considers two investment possibilities: (i) Money market (1M-Euribor rate = 1% p.a., risk free) and (ii) stock market (expected return of the market portfolio = 11% p.a., volatility = 30 p.a.).

Task: Calculate the beta of this portfolio, when the %-fraction (i.e. the weight) of the stock market is 75% in this portfolio. Provide your solution with 2 decimal places (like, e.g., 7.12 (English TUWEL version) or 7,12 (German TUWEL version)), without %-sign.

Assets with better long-run performance tend to be  …..  .

An investor wants to generate a portfolio with an expected return of 7% p.a. and considers two investment possibilities: (i) Money market (1M-Euribor rate = 1% p.a., risk free) and (ii) stock market (expected return of the market portfolio = 10% p.a., volatility = 30 p.a.).

Task: Calculate the %-fraction (i.e. the weight) the stock market should have in this portfolio. Provide your solution in % with 2 decimal places (like, e.g., 7.12 (English TUWEL version) or 7,12 (German TUWEL version)), without %-sign.

The slope of the capital market line (CML) equals  ..…  .

The  ..…  risk of a stock portfolio decreases with the number of companies the portfolio contains.

You are planning to invest in two companies, Apple and Lenzing with the following characteristics:

Task: Calculate the %-fraction of Apple in the minimum variance portfolio (MVP). Provide your solution in % with 2 decimal places (like, e.g., 7.12 (English TUWEL version) or 7,12 (German TUWEL version)), without %-sign.

The beta (β) coefficient of a stock  ..…  .

“Fat tails” in financial return time series are typically associated with  ..…  observations around the mean compared to a normal distribution.

A stock company is undertaking a seasoned equity offering with the following features:

* 5:1:€10 (number of old shares : number of new shares : price per new share in €)

* The share price (closing price) on the last trading day before the ex-subscription rights day is €22.

Task:

Before the seasoned equity offering an investor owns 100 shares and €2,000 in cash. She is going to exercise all her subscription rights. The value of the subscription right is €2.

Calculate the value of her shares immediately after she has exercised all subscription rights (on the morning of the ex-date), in €, with 2 decimal places (like, e.g., 7.12 (English TUWEL version) or 7,12 (German TUWEL version)), without %-sign.