On January 1, FinCorp Inc. published the following forecasts for the economy: During the year you observed
Question:
On January 1, FinCorp Inc. published the following forecasts for the economy:
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During the year you observed quarterly returns of 2 percent, −5 percent, 3 percent, and 8 percent.
a. Calculate the ex ante expected quarterly return.
b. Calculate the ex ante standard deviation of quarterly returns.
c. Calculate the ex post average quarterly return.
d. Calculate the ex post standard deviation of quarterly returns.
e. Explain the difference between the ex ante and ex post returns.
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a Expected return 20 3 50 5 30 8 43 b We cannot say the variance is 015 If the retu...View the full answer
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Related Book For 
Introduction To Corporate Finance
ISBN: 9781118300763
3rd Edition
Authors: Laurence Booth, Sean Cleary
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