Using the following returns, calculate the average returns, the variances, and the standard deviations for X and Y.
Answer to relevant QuestionsRefer to Table 10.1 in the text and look at the period from 1973 through 1978. a. Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. b. Calculate the standard deviation of ...A stock has a beta of 1.15 and an expected return of 14 percent. A risk-free asset currently earns 4.2 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? b. If a portfolio of ...Suppose the expected returns and standard deviations of stocks A and B are E( R A ) = .11, E( R B ) = .14, σA = .52, and σB = .65, respectively. a. Calculate the expected return and standard deviation of a portfolio that ...There are two stocks in the market: stock A and stock B. The price of stock A today is $52. The price of stock A next year will be $40 if the economy is in a recession, $59 if the economy is normal, and $68 if the economy is ...Kose, Inc., has a target debt-equity ratio of .65. Its WACC is 11.2 percent, and the tax rate is 35 percent. a. If Kose’s cost of equity is 15 percent, what is its pretax cost of debt? b. If instead you know that the ...
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