Question
In: Finance
Use the following table to answer questions 1 - 6: State of Economy Probability of State...
Use the following table to answer questions 1 - 6:
|
State of Economy |
Probability of State of Economy |
Asset A Rate of Return |
Asset B Rate of Return |
|
Boom |
0.3 |
0.13 |
0.08 |
|
Normal |
0.5 |
0.06 |
0.05 |
|
Recession |
0.2 |
-0.05 |
-0.01 |
-
What is the expected return for asset A?
-
What is the expected return for asset B?
-
What is the standard deviation for asset A?
-
What is the standard deviation for asset B?
-
What is the expected return of a portfolio that has 70% in Asset A and 30% in Asset B?
-
The standard deviation of the 70% A and 30% B portfolio most likely should:
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Solutions
Expert Solution
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -
jeff jeffy answered 1 month agoRelated Solutions
Use the following information to answer the questions. State of Economy Probability of State Return on...
Use the following information to answer the questions.
State of Economy
Probability of State
Return on Asset d in State
Return on Asset e in State
Return on Asset f in State
Boom
0.38
0.06
0.34
0.16
Normal
0.52
0.06
0.15
0.12
Recession
0.10
0.06
-0.21
-0.09
a. What is the expected return of each asset?
b. What is the variance of each asset?
c. what is the Standard deviation of each asset?
Use the following information to answer the questions. State of Economy Probability of State Return on...
Use the following information to answer the questions.
State of Economy
Probability of State
Return on Asset d in State
Return on Asset e in State
Return on Asset f in State
Boom
0.32
0.07
0.28
0.16
Normal
0.46
0.07
0.19
0.08
Recession
0.22
0.07
-0.21
-0.07
a. What is the expected return of each asset?
b. What is the variance of each asset?
c. what is the Standard deviation of each asset?
refer to the table of data below and answer the questions that follow economic state probability...
refer to the table of data below and answer the questions that
follow
economic state probability of economic state return on stock J
return on stock K
bear 0.25 -0.02 0.034
normal 0.60 0.138 0.062
bull 0.15 0.218 0.092
calculate the expected return of each stock
if a portfolio was created with from 30% of stock j and 70% of
stock k what is the expected return of the portfolio?
calculate the standard deviation of each stock?
calculate the covariance...
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard deviation. Use
the following information to answer the questions.
State of
Economy
Probability
of State
Return on
Asset R in
State
Return on
Asset S in
State
Return on
Asset T in
State
Boom
0.29
0.035
0.300
0.470
Growth
0.36
0.035
0.140
0.330
Stagnant
0.21
0.035
0.180
0.035
Recession
0.14
0.035
−0.035
−0.160
a. What is the expected return of each
asset?
b. What are the variance and the standard
deviation of each asset?
c. What...
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard deviation.
Use the following information to answer the questions.
State of
Economy
Probability
of State
Return on Asset J in
State
Return on Asset K in
State
Return on Asset L in
State
Boom
0.24
0.055
0.210
0.290
Growth
0.38
0.055
0.130
0.190
Stagnant
0.22
0.055
0.030
0.070
Recession
0.16
0.055
−0.090
−0.220
a. What is the expected return of each asset?
b. What is the variance and the standard deviation of each
asset?
c. What...
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard deviation.
Use the following information to answer the questions.
State of
Economy
Probability
of State
Return on
Asset R in
State
Return on
Asset S in
State
Return on
Asset T in
State
Boom
0.29
0.020
0.300
0.450
Growth
0.38
0.020
0.140
0.300
Stagnant
0.22
0.020
0.170
0.015
Recession
0.11
0.020
−0.030
−0.165
a. What is the expected return of each asset?
b. What are the variance and the standard deviation of each
asset?
c. What...
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard
deviation.
Use the following information to answer the questions.
State of
Economy
Probability
of State
Return on
Asset J in
State
Return on
Asset K in
State
Return on
Asset L in
State
Boom
0.25
0.065
0.230
0.260
Growth
0.36
0.065
0.140
0.210
Stagnant
0.23
0.065
0.065
0.055
Recession
0.16
0.065
-0.080
−0.210
a. What is the expected return of asset J?
_____
(Round to four decimal places.)
What is the expected return of asset K?...
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard deviation.
Use the following information to answer the questions.
State of
Economy
Probability
of State
Return on
Asset A in
State
Return on
Asset B in
State
Return on
Asset C in
State
Boom
0.34
0.02
0.22
0.35
Normal
0.52
0.02
0.09
0.23
Recession
0.14
0.02
−0.02
−0.21
a. What is the expected return of each asset?
b. What is the variance of each asset?
c. What is the standard deviation of each asset?
Hint: Make...
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard deviation.
Use the following information to answer the questions.
State of
Economy
Probability
of State
Return on
Asset D in
State
Return on
Asset E in
State
Return on
Asset F in
State
Boom
0.34
0.07
0.29
0.17
Normal
0.54
0.07
0.19
0.13
Recession
0.12
0.07
−0.24
−0.05
a. What is the expected return of each asset?
b. What is the variance of each asset?
c. What is the standard deviation of each asset?
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard
deviation.
Use the following information to answer the questions.
State of
Economy
Probability
of State
Return on
Asset D in
State
Return on
Asset E in
State
Return on
Asset F in
State
Boom
0.38
0.08
0.31
0.19
Normal
0.48
0.08
0.17
0.13
Recession
0.14
0.08
−0.22
- 0.04
a. What is the expected return of each asset?
b. What is the variance of each asset?
c. What is the standard deviation of each asset?
Hint:...
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