Question
In: Finance
The expected rate of return for Stock A is? The investment's standard deviation for stock A?...
The expected rate of return for Stock A is?
The investment's standard deviation for stock A?
COMMON STOCK A COMMON STOCK
B
PROBABILITY RETURN PROBABILITY
RETURN
0.20 11% 0.10 -4%
0.60 16% 0.40 7%
0.20 19% 0.40 14%
0.10 22%
Solutions
jeff jeffy answered 1 month agoRelated Solutions
Suppose Merck stock offers an expected rate of return of 12% and a standard deviation of...
Suppose Merck stock offers an expected rate of return of 12% and
a standard deviation of 25%. The risk-free rate is 5%.
(a) Graph the Capital Allocation Lines (CAL) for Merck
stock.
(b) What is the Sharpe (reward-to-volatility) ratio of Merck
stock?
(c) If you have a portfolio of $15,000 with $5,000 invested in a
risk free security and $10,000 in Merck stock, what is the expected
rate of return of your portfolio? What is your portfolio's standard
deviation? What...
Stock X has an expected return of 11% and the standard deviation of the expected return...
Stock X has an expected return of 11% and the standard deviation
of the expected return is 12%. Stock Z has an expected return of 9%
and the standard deviation of the expected return is 18%. The
correlation between the returns of the two stocks is +0.2. These
are the only two stocks in a hypothetical world.
A.What is the expected return and the
standard deviation of a portfolio consisting of 90% Stock X and 10%
Stock Z? Will any...
What are the expected return and standard deviation of stock A and stock B?
Consider the following information:
State Probability A
B
Boom 0.6
20% -5%
Bust 0.4
-10% 10%What are the expected return and standard deviation of stock A
and stock B?If you invest 50% of your money in stock A and 50% of your
money in stock B, what are the expected return and standard
deviation for the portfolio as a whole (considering both states of
the economy)?Use the results...
The expected return on stock W is 10% and its standard deviation is 15%. Expected return...
The expected return on stock W is 10% and its standard
deviation is 15%. Expected return on stock V is 16% and its
standard deviation is 24%. The correlation between returns of W and
V is 20%.
calculate expected return and standard deviation of a portfolio
that invests 40% in W and 60% in V.
determine the minimum variance combination of W and V and
determine its expected return and standard deviation.
If the risk-free rate is 4%, determine the...
What are the expected return and the standard deviation for the CoR Stock? CoR Stock...
What are the expected return and the standard deviation for the
CoR Stock?
CoR Stock
Scenario
Probability of Scenario
Rate of Return
Worst Case
0.10
−11%
Poor Case
0.20
−4%
Most Likely
0.40
−2%
Good Case
0.20
8%
Best Case
0.10
14%
Stock A has an expected return of 16% and a standard deviation of 30%.
Stock A has an expected return of 16% and a standard deviation
of 30%. Stock B has an expected return of 14% and a standard
deviation of 13%. The risk-free rate is 4.7% and the correlation
between Stock A and Stock B is 0.9. Build the optimal risky
portfolio of Stock A and Stock B. What is the expected return on
this portfolio?
What are the expected return and the standard deviation for the CoR Stock? &nb
What are the expected return and the standard deviation for the
CoR Stock?
CoR
Stock
Scenario
Probability of Scenario
Rate of Return
Worst Case
0.10
−11%
Poor Case
0.20
−4%
Most Likely
0.40
−2%
Good Case
0.20
8%
Best Case
0.10
14%
Your client decides to invest $1.4 million in Flama stock and
$0.6 million in Blanca stock. The risk-free rate is 4% and the
market risk premium is 5%. The beta of the Flama Stock is 1.2; and...
Expected Return Standard Deviation Stock fund (S) 20%  
Expected Return Standard Deviation
Stock fund (S)
20%
30%
Bond fund (B)
12%
15%
Correlation = .10
7. If you were to use only the two risky funds, and still
require an expected return of 14%, what would be the investment
proportions of your portfolio? Compare its standard deviation to
that of the optimized portfolio in Problem 9. What do you
conclude?
Problem 9
Stock Expected Return
Standard Deviation
A
10%
5%
B...
What are the expected return and the standard deviation for the CoR Stock? &nb
What are the expected return and the standard deviation for the
CoR Stock?
CoR
Stock
Scenario
Probability of Scenario
Rate of Return
Worst Case
0.10
−11%
Poor Case
0.20
−4%
Most Likely
0.40
−2%
Good Case
0.20
8%
Best Case
0.10
14%
Your client decides to invest $1.4 million in Flama stock and
$0.6 million in Blanca stock. The risk-free rate is 4% and the
market risk premium is 5%. The beta of the Flama Stock is 1.2; and...
Stock A has an expected annual return of 24% and a return standard deviation of 28%....
Stock A has an expected annual return of 24% and a return
standard deviation of 28%. Stock B has an expected return 20% and a
return standard deviation of 32%. If you are a risk averse
investor, which of the following is true?
A. You would never include Stock B in your portfolio, as it
offers a lower return and a higher risk.
B. Under certain conditions you would put all your money in
Stock B.
C. You would never...
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