8. Your investment has a 20% chance of earning a 25% rate of return, a 50%...

8. Your investment has a 20% chance of earning a 25% rate of return, a 50% chance of earning a 12% rate of return and a 30% chance of losing 10%. What is your expected return on this investment? What is the standard deviation? What is the coefficient of variation?

Expert Solution

Expected return=Respective return*Respective probability

=(0.2*25)+(0.5*12)+(0.3*-10)

=8%

probability	Return	probability*(Return-Expected Return)^2
0.2	25	0.2*(25-8)^2=57.8
0.5	12	0.5*(12-8)^2=8
0.3	-10	0.3*(-10-8)^2=97.2
		Total=163%

Standard deviation=[Total probability*(Return-Expected Return)^2/Total probability]^(1/2)

=(163)^(1/2)

=12.77%(Approx)

Coefficient of variation=Standard deviation/Expected return

=12.77/8

=1.596(Approx)

jeff jeffy answered 2 years ago

Your investment has a 20% chance of earning a 26% rate of return, a 50% chance...

Your investment has a 20% chance of earning a 26% rate of return, a 50% chance of earning a 15% rate of return and a 30% chance of losing 9%. What is your expected return on this investment? Enter answer in percents, accurate to two decimal places.

Your investment has a 30% chance of earning a 10% rate of return, a 40% chance of earning a 23% rate of return and a 30% chance of earning -7%. What is the standard deviation on this investment?

Your investment has a 30% chance of earning a 10% rate of return, a 40% chance of earning a 23% rate of return and a 30% chance of earning -7%. What is the standard deviation on this investment? (Put your answers in decimal points instead of percentage)You calculated that the average return of your portfolio is 7% and the standard deviation is 17%, what is the value at risk (VaR) at 5% for your portfolio?

Your investment has a 15% chance of earning a 35% rate of return, a 55% chance...

Your investment has a 15% chance of earning a 35% rate of return, a 55% chance of earning a 15% rate of return, and a 30% chance of losing 7%. Your expected return on this investment is % Please enter your answer with TWO decimal points.

Stock has a 25% chance of producing a 36% return, a 50% chance of producing a...

Stock has a 25% chance of producing a 36% return, a 50% chance of producing a 12% return, and a 25% chance of producing a -18% return. What is the firm's standard deviation? Do not round your intermediate calculations.

1. A firm's stock has 50% chance of a 13% rate of return and a 50% chance...

1. A firm's stock has 50% chance of a 13% rate of return and a 50% chance of a 20% rate of return. What is the standard deviation of return for this stock? Answer as a percent return to the nearest hundredth of a percent as in xx.xx without entering a percent symbol. 2. A firm's stock has 50% chance of a 35% rate of return. a 30% chance of a 18% rate of return. and a 20% chance of a -24%...

Dothan Inc.'s stock has a 25% chance of producing a 16% return, a 50% chance of...

Dothan Inc.'s stock has a 25% chance of producing a 16% return, a 50% chance of producing a 12% return, and a 25% chance of producing a -18% return. What is the firm's expected rate of return? Do not round your intermediate calculations. a. 4.51% b. 4.29% c. 5.50% d. 4.68% e. 6.38%

Taggart Inc.'s stock has a 50% chance of producing a 25% return, a 30% chance of...

Taggart Inc.'s stock has a 50% chance of producing a 25% return, a 30% chance of producing a 10% return, and a 20% chance of producing a −28% return. a. What is their expected rate of return? b. What is their standard deviation of returns? c. What is their coefficient of variation?

Scenario Modeler’s prospective stock has a 15% chance of producing a 65% return, a 25% chance...

Scenario Modeler’s prospective stock has a 15% chance of producing a 65% return, a 25% chance of producing a 22% return, a 40% chance of producing a 7% return, and a 20% chance of producing a –24% return. What is the firm’s coefficient of variation of return? Enter your answer rounded to two decimal places. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

Rate of Return Scenario Probability Stocks Bonds Recession .20 −8 % +16 % Normal economy .50...

Rate of Return Scenario Probability Stocks Bonds Recession .20 −8 % +16 % Normal economy .50 +19 +9 Boom .30 +25 +6 Consider a portfolio with weights of .6 in stocks and .4 in bonds. a. What is the rate of return on the portfolio in each scenario? (Do not round intermediate calculations. Round your answers to 1 decimal place.) Scenario Rate of Return Recession % Normal economy % Boom % b. What are the expected...

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%

Question