Question: 1. Find the mean, variance, standard deviation, and beta for the components w, x, y, z, RF (risk-free security proxied T-Bill), the market (proxied by

1. Find the mean, variance, standard deviation, and beta for the components w, x, y, z, RF (risk-free security proxied T-Bill), the market (proxied by the S&P500) and the computed portfolio made up of equals parts of RF, Market, w, x, y, and z (i.e., the weight for each asset is 1/6). Show percent values to 2 decimal places and number values to 4 decimal places.
State of Returns per State of Nature for Each Security
Nature RF Market w x y z Portfolio
Prob; Weights 16.67% 16.67% 16.67% 16.67% 16.67% 16.67% 100.00%
Good 20% 4.00% 14.00% -1.00% 18.00% 10.00% 6.00%
Average 50% 4.00% 8.00% 6.00% 12.00% 6.20% 4.50%
Poor 30% 4.00% 2.00% 10.00% -3.40% 3.30% 3.50%
Mean
Variance
Std Dev
beta
Required Return (CML)
CML efficient (Y/N)
Required Return (SML)
SML efficient (Y/N)
Mean Var Efficient Set

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

primarily need number 4 answered (10 Points) 3. As a measure of FDX's current cost of debt, FDX Corp.-Bond issued new long-term bonds on October 17, 2018 of $850,000,000 par value with a coupon rate...

Q:

Solve the following questions using the data given below. Stocks Mean Return Standard Deviation 1.2 Y 12 2 Correlations X and Y 0.3 Covariance with the market 4 Y 2 Market Variance 4 Other Betas...

Q:

1 Normal 1 No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em... Emphasis Intense Torwig queen besu vuru serveru Styles Stocks Mean Return Standard Deviation X 8 1.2 Y 12 2 RF 0.50 0...

Q:

I am completely lost, cannot find none of the answers to these questions Question 1 Suppose your expectations regarding the stock market are as follows: State of the Economy Boom Normal growth...

Q:

This question is designed to deepen your understanding of CAPM by practicing the use of CAPM formula. In Simple World there are only two risky stocks, A and B, whose details are listed in the...

Q:

SAMPLING MEAN: DEFINITION: The term sampling mean is a statistical term used to describe the properties of statistical distributions. In statistical terms, the sample mean from a group of...

Q:

I am wondering if anyone has corrected solutions to fnce 300 assignments 1 2 and 3. I am concered about my answers and would love to compare. Pretty sure on my answers for 1 and 2 mainly interested...

Q:

Why does the weighted sum of the standard deviations of the components making up the portfolio NOT equal to the portfolios standard deviation? State of Nature Returns per State of Nature for Each...

Q:

Active Portfolio Management and Evaluation Objective: The objective of this project is to employ performance evaluation techniques to assess the performance of a number of actively managed equity...

Q:

Suppose a portfolio consists of 50% of stock Do and 50% of stock GDT, calculate the beta of this portfolio (use stock betas estimated from 5 to compute the portfolio's beta (1 point). What is the...

Q:

Experian Marketing Services reported that the typical American spends a mean of 144 minutes (2.4 hours) per day accessing the Internet via a mobile device. (Source: The 2014 Digital Marketer,...

Q:

A company has three laptop assembly plants running at full capacity in Des Moines, Racine, and Gary. These plants supply four distribution warehouses in St. Paul, Milwaukee, Chicago, and Detroit. The...

Q:

Required: How many subaccounts does your COA list for 1 2 0 0 Prepaid Expenses? What are the account numbers and account names of the subaccounts for 1 2 0 0 Prepaid Expenses? How many subaccounts...

Q:

9. (15 points) A company is considering a new project that requires an investment of \$5 million. The project is expected to generate cash flows of $2 million in year 1,$3 million in year 2, and $4...

Q:

Teamwork. Ethics. Form a group of two or three students. Decide what you believe would be the best way to respond to each of the unacceptable questions included in this chapter. Also, discuss ethical...

Q:

Teamwork. Form a group of three or four students and gather employment information and job listings for the following positions.Make an effort to use at least four of the sources identified in the...

Q:

List the names of individuals in your personal network of friends, relatives, instructors, and acquaintances who could be valuable to you in a job search. From this list, develop a reference list....