questions D,E,F,G

only need questiond E, F, G done

questions

wn with their probabilities and associated outcomes. (For now, disregard the items at the bottom of the data; you I fill in the blanks later.) Alternative Investments Estimated Rate of Return ate of the onomy Probability T-Bills Tech Collections U.S. Rubber Market Portfolio 2-Stock Portfolio cession 5.5% 27.0% 6.0% (27.0%) (7.0) 0.0% 13.0 (14.01 (17.0%) 3.0) 10.0 15.0 0.0 310 low average erage bove average som s 30.0 (11.0) 41.0 25.0 21.0 26.0 38.9 10.5% 152 Vote: "The estimated returns of U.S. Rubber do not always move in the same direction as the overall economy. For example, when the economy is below average, consumers purchase fewer tires than they would if the economy was stronger. However, if the economy is in a flat-out recession, a large number of consumers who were planning to purchase a new car may choose to wait and instead purchase new tires for the car they currently own. Under these circumstances, we would expect US. Rubber's stock price to be higher if there is a recession than if the economy is just below average Memill Finch's economic forecasting staff has developed probability estimates for the state of the economy, and its security analysts developed a phisticated computer preseram to estimate the rate of return on each alternative under each state of the economy. High Tech Ine sanelectronic m: Collections Inc, collects past due debts and U.S. Rubber manufactures tires and various other rubber and plastics products. Merrill Finch also maintains a publicly traded stocks you can invest in that 3 LEHER RISK AND RETURN Assume that you recently graduated with a major in finance. You just landed a job as a financial planner with Merrill Finch Inc., a large financial services corporation. Your first assignment is to invest $100,000 for a dient. Because the funds are to be invested in a business at the end of 1 year, you have been instructed to plan for a 1e vear holding period. Further, your boss has restricted you to the investment alternatives in the following table. shown with their probabilities and associated outcomes. (For now, disregard the items at the bottom of the data; you will fill in the blanks later.) Returns on Alternative Investments Estimated Rate of Return High U.S. Rubber Market Portfolio 2-Stock Portfolio Collections 1270%) 0.0% State of the Economy Recession Below average Average Above average Boom (17.0%) (3.0) 1 59 999 100 S80 (11.09 25.0 Note The estimated returns of U.S. Rubber do not always move in the same direction as the overall economy. For example, when the economy is below average, consumers purchase fewer tires than they would if the economy was stronger However, if the economy is in a flat-out recession a large number of consumers who were planning to purchase a new car may choose to wait and instead purchase new tires for the cat they currently own. Under these circumstances, we would expect U.S. Rubber's stock price to be higher if there is a recession than if the economy is just below average Merrill Finch'sconomic fonteasti a l has develop a probability estimates for the state of the economy, and i Security analysts developed a sophisheated computer program to stimate the rate of naman ahallamme under each state of the economy High Tech Inc is an electronie firm Collectie Weve updated our read aloud feature d manufactures tins and various other rubber and plastics prodo Give it a try here Note The estimated returns of U.S. Rubber do not always move in the same direction as the overall economy. For example, the economy is below average, consumers purchase fewer tires than they would if the economy was stronger. However, it the economy is in a flat-out recession, a large number of consumers who were planning to purchase a new car may choose to wait and instead purchase new tires for the car they currently own. Under these circumstances, we would expect US. Rubber's stock price to be higher if there is a recession than if the economy is just below average. Merri Finch's economic forecasting staff has developed probability estimates for the state of the economy, and its s rity analysts developed a sophisticated computer program to estimate the rate of return on each alternative ander each state of the economy. High Tech Inc. is an electronics firm, Collections Inc, collects past due debts; and USRubber manufactures tires and various other rubber and plastics products. Merrill Finch also maintains a UTKU Portfolio that owns a market-weighted action of all publicly traded stocks you can invest in that folo and thus obtain average stock market results. Given the situation described, answer the following Why is the T-bill's retum independent of the state of the economy? Do T-bills promise a completely risk-free return? Explain High Tech's returns expected to move With the exxonomy, whereas Collections's are expected to e counter to the economy lculate the expected rate of return on each alternative and fill in the blanks on the row for r in the previous table. recognize that basing On silly on expected return is appropriate only for riske neutral Bcause your client, like mest pop risksverse the riskiness of each alternative is an important NE W One possible measure of risk is the standard deviation of returns wn with their probabilities and associated outcomes. (For now, disregard the items at the bottom of the data; you I fill in the blanks later.) Alternative Investments Estimated Rate of Return ate of the onomy Probability T-Bills Tech Collections U.S. Rubber Market Portfolio 2-Stock Portfolio cession 5.5% 27.0% 6.0% (27.0%) (7.0) 0.0% 13.0 (14.01 (17.0%) 3.0) 10.0 15.0 0.0 310 low average erage bove average som s 30.0 (11.0) 41.0 25.0 21.0 26.0 38.9 10.5% 152 Vote: "The estimated returns of U.S. Rubber do not always move in the same direction as the overall economy. For example, when the economy is below average, consumers purchase fewer tires than they would if the economy was stronger. However, if the economy is in a flat-out recession, a large number of consumers who were planning to purchase a new car may choose to wait and instead purchase new tires for the car they currently own. Under these circumstances, we would expect US. Rubber's stock price to be higher if there is a recession than if the economy is just below average Memill Finch's economic forecasting staff has developed probability estimates for the state of the economy, and its security analysts developed a phisticated computer preseram to estimate the rate of return on each alternative under each state of the economy. High Tech Ine sanelectronic m: Collections Inc, collects past due debts and U.S. Rubber manufactures tires and various other rubber and plastics products. Merrill Finch also maintains a publicly traded stocks you can invest in that 3 LEHER RISK AND RETURN Assume that you recently graduated with a major in finance. You just landed a job as a financial planner with Merrill Finch Inc., a large financial services corporation. Your first assignment is to invest $100,000 for a dient. Because the funds are to be invested in a business at the end of 1 year, you have been instructed to plan for a 1e vear holding period. Further, your boss has restricted you to the investment alternatives in the following table. shown with their probabilities and associated outcomes. (For now, disregard the items at the bottom of the data; you will fill in the blanks later.) Returns on Alternative Investments Estimated Rate of Return High U.S. Rubber Market Portfolio 2-Stock Portfolio Collections 1270%) 0.0% State of the Economy Recession Below average Average Above average Boom (17.0%) (3.0) 1 59 999 100 S80 (11.09 25.0 Note The estimated returns of U.S. Rubber do not always move in the same direction as the overall economy. For example, when the economy is below average, consumers purchase fewer tires than they would if the economy was stronger However, if the economy is in a flat-out recession a large number of consumers who were planning to purchase a new car may choose to wait and instead purchase new tires for the cat they currently own. Under these circumstances, we would expect U.S. Rubber's stock price to be higher if there is a recession than if the economy is just below average Merrill Finch'sconomic fonteasti a l has develop a probability estimates for the state of the economy, and i Security analysts developed a sophisheated computer program to stimate the rate of naman ahallamme under each state of the economy High Tech Inc is an electronie firm Collectie Weve updated our read aloud feature d manufactures tins and various other rubber and plastics prodo Give it a try here Note The estimated returns of U.S. Rubber do not always move in the same direction as the overall economy. For example, the economy is below average, consumers purchase fewer tires than they would if the economy was stronger. However, it the economy is in a flat-out recession, a large number of consumers who were planning to purchase a new car may choose to wait and instead purchase new tires for the car they currently own. Under these circumstances, we would expect US. Rubber's stock price to be higher if there is a recession than if the economy is just below average. Merri Finch's economic forecasting staff has developed probability estimates for the state of the economy, and its s rity analysts developed a sophisticated computer program to estimate the rate of return on each alternative ander each state of the economy. High Tech Inc. is an electronics firm, Collections Inc, collects past due debts; and USRubber manufactures tires and various other rubber and plastics products. Merrill Finch also maintains a UTKU Portfolio that owns a market-weighted action of all publicly traded stocks you can invest in that folo and thus obtain average stock market results. Given the situation described, answer the following Why is the T-bill's retum independent of the state of the economy? Do T-bills promise a completely risk-free return? Explain High Tech's returns expected to move With the exxonomy, whereas Collections's are expected to e counter to the economy lculate the expected rate of return on each alternative and fill in the blanks on the row for r in the previous table. recognize that basing On silly on expected return is appropriate only for riske neutral Bcause your client, like mest pop risksverse the riskiness of each alternative is an important NE W One possible measure of risk is the standard deviation of returns