Calculating Returns and Standard Deviations 11.6 Based on the following information, calculate the expected return and...
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Calculating Returns and Standard Deviations 11.6 Based on the following information, calculate the expected return and standard deviation for the two stocks: State of economy Recession Normal Boom Depression Recession Normal Boom Probability of state of economy 11.7 Based on the following information, calculate the expected return and standard deviation: State of economy Probability of state of economy Rate of return if state occurs 0.10 -0,105 0.25 0.059 0.45 0.20 Returns and Standard Deviations 11.9 Consider the following information: State of economy Boom Bust. 0.20 0.55 0.25 Rate of return if state occurs Stock A Stock B -0.20 0.13 0.33 Calculating Expected Returns 11.8 A portfolio is invested 10 percent in stock G, 65 percent in stock J. and 25 percent in stock K. The expected returns on these stocks are 9 percent. 11 percent, and 14 percent, respectively. What is the portfolio's expected return? How do you interpret your answer? Probability of state of economy 0.65 0.35 0.06 0.07 0.11 0.130 0.211 Rate of return if state occurs Stock A Stock B Stock C 0.07 0.15 0.13 0.03 0.33 -0.06 a. What is the expected return on an equally weighted portfolio of these three stocks? b. What is the variance of a portfolio invested 20 percent each in A and B. and 60 percent in C? Calculating Returns and Standard Deviations 11.6 Based on the following information, calculate the expected return and standard deviation for the two stocks: State of economy Recession Normal Boom Depression Recession Normal Boom Probability of state of economy 11.7 Based on the following information, calculate the expected return and standard deviation: State of economy Probability of state of economy Rate of return if state occurs 0.10 -0,105 0.25 0.059 0.45 0.20 Returns and Standard Deviations 11.9 Consider the following information: State of economy Boom Bust. 0.20 0.55 0.25 Rate of return if state occurs Stock A Stock B -0.20 0.13 0.33 Calculating Expected Returns 11.8 A portfolio is invested 10 percent in stock G, 65 percent in stock J. and 25 percent in stock K. The expected returns on these stocks are 9 percent. 11 percent, and 14 percent, respectively. What is the portfolio's expected return? How do you interpret your answer? Probability of state of economy 0.65 0.35 0.06 0.07 0.11 0.130 0.211 Rate of return if state occurs Stock A Stock B Stock C 0.07 0.15 0.13 0.03 0.33 -0.06 a. What is the expected return on an equally weighted portfolio of these three stocks? b. What is the variance of a portfolio invested 20 percent each in A and B. and 60 percent in C?
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ANSWER 116 Expected return for Stock A 0099 Standard deviation for Stock A 014 Expected return for S... View the full answer
Related Book For
Corporate Finance Core Principles and Applications
ISBN: 978-0077905200
3rd edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford
Posted Date:
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