Question
In: Finance
. Use the following information to calculate your company's expected return State Probability Return Boom 20%...
. Use the following information to calculate your company's expected return State Probability Return Boom 20% 0.34 Normal 60% 0.10 Recession 20% -0.16 Round to two decimal places ANSWER:
Solutions
Expert Solution
Ans 0.10
| State | Probability (i) | Return (ii) | Probability * Return (i)* (ii) |
| Boom | 20.00% | 0.34 | 0.07 |
| Normal | 60.00% | 0.10 | 0.06 |
| Recession | 20.00% | (0.16) | (0.03) |
| Total | 0.10 |
jeff jeffy answered 10 months agoRelated Solutions
The probability of state in boom economy is 20%. The rate of stock return is 20%...
The probability of state in boom economy is 20%. The rate of
stock return is 20% and the bond rate of return is 10%.
The probability of state in normal good growth economy is 25%.
The stock rate of return is 10% and the bond rate of return is
5%
The probability of state in normal growth economy is 15%. The
stock rate of return is 3% and the bond rate of return is 5%
The probability of state in...
Use the following information to find expected return for this portfolio. State of Economy Probability of...
Use the following information to find expected
return for this portfolio.
State of Economy
Probability of State
Returns if State Occurs
Stock A
Stock B
Stock C
Stock D
Boom
40%
-15%
16%
25%
20%
Normal
30%
5%
10%
-3%
2%
Recession
30%
28%
6%
-10%
-5%
Portfolio Weights
10%
20%
30%
40%
ANSWERS:
11.20%
3.90%
8.19%
7.08%
7.30%
Use the following information to find expected return for this portfolio. State of Economy Probability of...
Use the following information to find expected
return for this portfolio.
State of Economy
Probability of State
Returns if State Occurs
Stock A
Stock B
Stock C
Stock D
Boom
40%
-15%
16%
25%
20%
Normal
30%
5%
10%
-3%
2%
Recession
30%
28%
6%
-10%
-5%
Portfolio Weights
10%
20%
30%
40%
ANSWERS:
11.20%
3.90%
8.19%
7.08%
7.30%
Compute the expected return for the following investment State of nature Probability Return Boom 25% 20% Average 60% 8% Recession 15% 0%
Compute the expected return for the following investmentState of nature Probability ReturnBoom 25% 20%Average 60% 8%Recession 15% 0%
Calculate the expected return based on the information in the table below State of economy Probability...
Calculate the expected return based on the information in the
table below
State of economy
Probability of state of economy
Rate of return if state occurs
Recession
.30
-.07
Normal
.60
.13
Boom
.10
.23
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?
expected return and standard deviation. state of E, boom growth stagnant recession probability of S, 0.29. ...
expected return and standard deviation.
state of
E,
boom growth stagnant recession
probability of S,
0.29.
0.36.
0.22. 0.13
return on AssetJ 0.055. 0.055.
0.055. 0.055
return on assetK. 0.190. 0.100.
0.040. -0.080
return on assetL. 0.280. 0.190.
0.050. -0.180
what is the expected return of each asset?
what is the variance and the standard deviation of
each asset?
what is the expected return of a portfolio with 9% in
asset j. 48% in asset K, and 43% in asset...
Use the following information to calculate the expected return and standard deviation of a portfolio that...
Use the following information to calculate the expected return
and standard deviation of a portfolio that is 30 percent invested
in 3 Doors, Inc., and 70 percent invested in Down Co.
3 Doors, Inc
Down Co
Expected Return, E(R)
18%
14%
Standard deviation
48
50
Correlation .33
Use the following information to calculate the expected return and standard deviation of a portfolio that...
Use the following information to calculate the expected return
and standard deviation of a portfolio that is 50 percent invested
in 3 Doors, Inc., and 50 percent invested in Down Co.: (Do
not round intermediate calculations. Enter your answers as a
percent rounded to 2 decimal places.)
3 Doors, Inc.
Down Co.
Expected return, E(R)
14
%
10
%
Standard deviation, σ
42
31
Correlation
0.10
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