Consider the following Information: State of Economy Boom Good Poor Bust Probability of State of Economy...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Consider the following Information: State of Economy Boom Good Poor Bust Probability of State of Economy 17 43 33 07 a. Expected return b. Variance c. Standard deviation Rate of Return if State Occurs Stock A Stock B Stock C 358 458 338 128 108 178 .018 .028 -.062 -118 -258 -.098 a. Your portfolio is invested 29 percent each in A and C and 42 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) c. What is the standard deviation of this portfolio? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.. 32.16.) % % Consider the following information: Economy Recession Normal Boom Probability of Rate of Return if State Occurs State of Economy 23 58 19 Stock A 025 105 .270 a. Expected return of A Expected return of B b. Standard deviation of A Standard deviation of B a. Calculate the expected return for the two stocks. (Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.. 32.16.) b. Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.. 32.16.) Stock B -38 28 51 % % % % Consider the following Information: State of Economy Boom Good Poor Bust Probability of State of Economy 17 43 33 07 a. Expected return b. Variance c. Standard deviation Rate of Return if State Occurs Stock A Stock B Stock C 358 458 338 128 108 178 .018 .028 -.062 -118 -258 -.098 a. Your portfolio is invested 29 percent each in A and C and 42 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) c. What is the standard deviation of this portfolio? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.. 32.16.) % % Consider the following information: Economy Recession Normal Boom Probability of Rate of Return if State Occurs State of Economy 23 58 19 Stock A 025 105 .270 a. Expected return of A Expected return of B b. Standard deviation of A Standard deviation of B a. Calculate the expected return for the two stocks. (Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.. 32.16.) b. Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.. 32.16.) Stock B -38 28 51 % % % %
Expert Answer:
Answer rating: 100% (QA)
Refer to the given values to calculate the value of the following a compute the value of the expecte... View the full answer
Related Book For
Fundamentals of Investments Valuation and Management
ISBN: 978-0077283292
5th edition
Authors: Bradford D. Jordan, Thomas W. Miller
Posted Date:
Students also viewed these economics questions
-
Consider the following information about three stocks: Rate of Return If State Occurs Probability of State of State of Economy Stock A Stock B Stock C Economy .25 oom .21 .33 .55 Normal .60 .17 .11...
-
Consider the following information: a. Your portfolio is invested 25 percent each in A and C, and 50 percent in B. What is the expected return of the portfolio? b. What is the variance of this...
-
What items should each staff member receive when beginning a veterinary job position?
-
Wi-Fi circuitry is now embedded in consumer electronic devices such as digital cameras and cell phones. Give an example of what you could do with the Wi-Fi capability of a digital camera.
-
Based on Exhibit 1, the forward rate of a one-year loan beginning in three years is closest to: A. 4.17%. B. 4.50%. C. 5.51%. Jane Nguyen is a senior bond trader for an investment bank, and Chris...
-
Explain public policies that protect employees from unlawful discharge.
-
Horizontal analysis refers to changes in financial statement numbers and ratios across two or more years. Vertical analysis refers to financial statement amounts expressed each year as proportions of...
-
Image transcription text Pipeline Speci?cations Design will need to examine: The tradeoff between the cost of compression [a function of minimum driver power) and the cost of pipeline [a function of...
-
What Are Empirical/Research Articles? Describe the resource assigned to you including two examples of how this resource will support your successful completion of the capstone project?
-
MJMLtd is considering the launch of a new product after an extensive market research whose costs were K20,000. The research cost is due for payment in a months time. Based on the research findings,...
-
calculate the following question from yhe data given below Review - Corporations Code: + Increase - Decrease Contributed Capital: Preferred Stock, 4%, $10 Par, cumulative, 10,000 shrs authorized,...
-
Analyze past returns. You have collected historical data on the annual returns earned over the past 10 years (data range from year -10 to year -1) for the stock market as a whole A and B stocks. This...
-
The rates of return of stock A and the market portfolio for the 12 months are given below: Month 1 Stock A 10 (%) Market Portfolio (%) 111) iv) 3 2 3 4 5 6 15 18. 14 16 16 12 14 13 10 7 18 8 9 10 11...
-
Anna is a Vice President at the J Corporation. The company is considering investing in a new factory and Anna must decide whether it is a feasible project. In order to assess the viability of the...
-
What is the total contribution margin at the current level of production for each model? What is the contribution margin per machine hour for each model? Given maximum capacity of 2,000 machine...
-
Raymond Group is a leading Indian branded fabric and fashion retailer, incorporated in 1925. It produces suiting fabric, with a capacity of producing 31 million meters of wool and wool-blended...
-
Does log 81 (2401) = log 3 (7)? Verify the claim algebraically.
-
You short sold 1,000 shares of stock at a price of $63 and an initial margin of 55 percent. If the maintenance margin is 30 percent, at what share price will you receive a margin call? What is your...
-
An open-end mutual fund typically keeps a percentage, often around 5 percent, of its assets in cash or liquid money market assets. How does this affect the fund's return in a year in which the market...
-
Why might the yield to maturity on, say, a BBB-rated municipal bond with moderate default risk actually be less than that of a U.S. Treasury bond with no default risk?
-
A football is thrown on a long pass. Compared to the balls initial horizontal velocity component, the velocity at the highest point is (a) greater, (b) less, (c) the same.
-
What process do you follow to make decisions for these different circumstances, and are you satisfied with the results?
-
A football is thrown on a long pass. Compared to the balls initial vertical velocity, the vertical component of its velocity at the highest point is (a) greater, (b) less, (c) the same.
Study smarter with the SolutionInn App