Given the year end prices of the following stocks, estimate the
standard deviation of the returns of a portfolio of 30% AAA and 70%
BBB. Enter your answer as a percent without the % sign. Round your
final answer to two decimals.
Year
AAA
BBB
2006
100
55
2007
105
65
2008
120
60
2009
110
70
2010
130
65
2011
160
80
What is the standard deviation of the returns on a portfolio
that is invested in stocks A, B, and C? 20 percent of the portfolio
is invested in stock A and 45 percent is invested in stock C.
State of Economy
Boom Normal Bust
Probability of Returns if State Occurs
State of Economy Stock A Stock B Stock C 20% 9% 3% 11%
55%4%5%8% 25% -2% 10% -13%
suppose the standard deviation of a stocks return is 25% per
year and the riskless return is 10% APR.Answer the below questions
using the Black -Scholas OPM. A. What is a 6 month call option on
this stock worth if the strick price is $90 and the stock price
is(Po)is currently at$104? B.what is the exercise value and the
time premiumof this optrion? C.Everything else being equal,what is
the value of a 6 month put option on the common stock?Use...
What is the standard deviation of the returns on a $40,000
portfolio which consists of stocks C and D? Stock C is valued at
$22,000.
State of
Economy
Probability of
State of Economy
Returns if State Occurs
Stock C
Stock D
Boom
20%
15%
4%
Normal
70%
9%
6%
Recession
10%
-2%
5%
Problem 11-28 Portfolio Standard Deviation
Suppose the expected returns and standard deviations of Stocks
A and B are E(RA) = .091,
E(RB) = .151, σA = .361, and
σB = .621.
a-1.
Calculate the expected return of a portfolio that is composed of
36 percent A and 64 percent B when the
correlation between the returns on A and B is
.51. (Do not round intermediate calculations and round your
final answer to 2 decimal places. (e.g., 32.16))
...
What is the standard deviation and mean returns for an equal
weighted portfolio that consists stocks X,Y,Z(equally weighted).
Use the data given below.
Stocks
Mean Return
Variance of Return
X
2
2.25
Y
4
36
Z
6
4
Correlations
X and Y
X and Z
Z and Y
0.5
0.2
0.9
2. A bond has a face value of $1000 with a time to maturity ten
years from now. The yield to maturity of the bond now is
10%. What is...
PLEASE SHOW WORK
A.What is the standard deviation of returns for Stocks A and
B?RA = 23.5% RB = 14.6% σA =
13.05% σB = 4.98%
State
Probability
Expected Return
Stock
A
Stock B
Expansion
30%
40%
22%
Normal
60%
20%
12%
Recession
10%
-5%
8%
B.What is the covariance of returns between stocks A and B?σA,B
= 60.9 %2
C.What is the correlation coefficient?ρA,B = 0.94
Weights, standard deviation, and average returns for 50 stocks
and a market index are known. The covariance matrix and correlation
is also known. We need to "Pick 5 assets and explain the reason why
you choose them". On what basis (Eg. The ones with the highest
returns, low standard deviation, etc.) should we pick
our stocks?
Regular gasoline averaged $2.83 per gallon in December 2018.
Assume the standard deviation for gasoline prices is $0.14 per
gallon. A random sample of 40 service stations was selected.
Complete parts a through d.
a. What is the probability that the sample mean will be less
than $2.84?
The probability that the sample mean will be less than $2.84 is
______
(Type an integer or decimal rounded to four decimal places as
needed.)
b. What is the probability that the...
The Standard Deviation of stock returns for Stock A is 60% and
The standard Deviation of market returns is 30% so If the
statistical correlation between Stock A and the overall market is
0.6, then the beta for stock A is: 60%/30% x 0.6= 1.2
What is the expected risk premium for investors with this beta
value compared to the market average for returns on investment?