Table 1. 1 contains some computations of the expected rate of return and variance of returns for
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Table 1. 1 contains some computations of the expected rate of return and variance of returns for an asset. Assume that the probability ps are changed to 0. 30, 0. 40, and 0. 30 in states 1, 2, and 3, respectively. Recompute the results to create a new Table 1. 1.
Table 1.1
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Table 1.1 Expected rate of return calculation (in percent terms) Rsj| Ps Rsj State Ps= probability 1 2 3 0.25 0.50 0.25 1.00 5 1.25 5.00 3.75 E (R) = 10 10 15 Rsj - E(Rsj) [Rsj-E(Rsj) -5 0 5 25 0 25 Ps[Rsj E(Rsj)1 6.25 0.00 6.25 a(Rj): 12.50 (Rj) = 3.5355
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Investment Valuation And Asset Pricing Models And Methods
ISBN: 9783031167836
1st Edition
Authors: James W. Kolari, Seppo Pynnönen
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