Question
In: Finance
Consider the following information on returns and probabilities: Invest 0 of your money in Asset A...
- Consider the following information on returns and probabilities:
Invest 0 of your money in Asset A and 100% in Asset B.
State Probability A B
Boom .25 12% 4%
Bust .75 6% 18%
what is the standard deviation of the return on the portfolio?
|
a. 1.7 |
||
|
b. 2.6 |
||
|
c. 3.9 |
||
|
d. 4.6 |
||
|
e. 5.6 |
||
|
f. 6.9 |
||
|
g. 7.5 |
||
|
h. 9.0 |
||
|
i. 8.2 |
||
|
j. 11 |
Solutions
Expert Solution
Formula:
# Please upvote if the solution
helps.
# You may use comments section to revert with additional queries if you have or if I have missed out on any aspect of your question
Thanks !
jeff jeffy answered 2 years agoRelated Solutions
Consider the following information on returns and probabilities: Invest 0 of your money in Asset A...
Consider the following information on returns and
probabilities:
Invest 0 of your money in Asset A and 100%in Asset B.
State Probability A B
Boom
.25 12% 4%
Bust
.75 6% 18%
What is the expected return for the
portfolio?
a. 1.7
b. 2.9
c. 3.9
d. 14.5
e. 15.5
f. 16.9
g. 7.5
h. 9.0
i. 8.2
j.
11 %
Consider the following information on returns and probabilities: Invest 100% of your money in Asset A...
Consider the following information on returns and
probabilities:
Invest 100% of your money in Asset A and 0% in Asset
B.
State Probability A B
Boom
.25 12% 4%
Bust
.75 6% 18%
what is the standard deviation of the return on Stock A in
%?
a. 1.7
b. 2.6
c. 3.9
d. 4.6
e. 5.5
f. 6.9
g. 7.5
h. 9.0
i. 8.2
j. 11
2) An investment project has the following cash flows: CF0 =
-1,200,000; C01 – C05 = 300,000 each
If the required rate...
Consider the following information on returns and probabilities: Invest 1/2 of your money in Asset A...
Consider the following information on returns and
probabilities:
Invest 1/2 of your money in Asset A and 1/2 in Asset B.
State Probability A B
Boom
.25 12% 4%
Bust
.75 6% 18%
what is the standard deviation of the return on the
portfolio?
a. 1.7
b. 2.9
c. 3.9
d. 4.6
e. 5.5
f. 6.9
g. 7.5
h. 9.0
i. 8.2
j.
11
Your asset has the following possible returns and probabilities that those returns will be realized: 10% chance...
Your asset has the following possible returns and probabilities
that those returns will be realized: 10% chance of 12%
return, 12% chance of a 10% return, 40% chance of an 8% return, 28%
chance of a 5% return, and 10% chance of a -2% return.
Calculate the expected return
Calculate the standard deviation
Calculate the Coefficient of Variation = standard
deviation/expected return.
2. An investment banker has recommended a $100,000 portfolio
containing three assets. $20,000 will be invested in the U.S....
1. Expected Return, Variance and standard Deviation Consider the following information on returns and probabilities: State...
1. Expected Return, Variance and standard Deviation
Consider the following information on returns and
probabilities:
State Probability X Y
Boom. .25 15%. 10%
Normal .60 10%. 9%
Recession .15 5% 10%
What are the expected return and standard deviation for Stock X
and Stock Y?
What are the expected return and standard deviation for a
portfolio with an
investment of $6,000 in asset X and $4,000 in asset Y?
Show work please
You invest all your money into a risky asset and a risk-free asset. The risky asset...
You invest all your money into a risky asset and a risk-free
asset. The risky asset has an expected return of 0.065 and a
standard deviation of 0.25, the risk-free asset returns 0.025. What
is the return on your combined portfolio if you invest 0.4 in the
risky asset, and the remainder in the risk-free asset? Round your
answer to the fourth decimal point.
Consider the following information on returns and probabilities: State Probability X Z Boom .25 15% 10%...
Consider the following information on returns and
probabilities:
State Probability X
Z
Boom .25 15% 10%
Normal .60 10% 9%
Recession .15 5% 10%
• Use a spreadsheet application (Excel Worksheet) to compute the
following:
1) expected return and standard deviation for a Fund-X
2) expected return and standard deviation for a Fund-Z
3) portfolio return if an investment of $6,000 in Fund X and
$4,000 in Fund Z
4) portfolio risk based on an investment of $6,000 in Fund...
The stock has the following returns and probabilities of those returns. What is the expected return...
The stock has the following returns and probabilities of those
returns. What is the expected return and risk of the stock using
the data? Use your knowledge (weighted average of returns to
calculate expected return and standard deviation of returns to
calculate risk).
return
probability
6%
70%
15%
30%
Also, How do you calculate portfolio beta? I have this problem
and have not been able to calculate the correct answer.
Using the table below what is the beta of the...
You have $1 million to invest, and you must invest all your money. The following are...
You have $1 million to invest, and you must invest all your
money. The following are assets you can invest: Expected Return
Beta Risk-free asset 6% Not given Stock X 30% 1.8 Stock Y 20%
1.3
(a) Suppose you want to create a portfolio that has an expected
return of 12% by investing in the risk-free asset and Stock X.
Calculate how much money you will invest in Stock X.
(b) Suppose you want to create a portfolio with a...
Aasir can invest his money in risk-free asset and/or in a fund F. The risk-free asset...
Aasir can invest his money in risk-free asset and/or in a
fund F. The risk-free asset provides a guaranteed return of 4%. The
fund F provides expected return of 12% with
volatility of 25%. If Aasir wants to limit his risk to no
more than 20%, what is the highest expected return he can earn? If
Aasir wants an expected return of at least 16%, what is
the
minimum possible volatility of his portfolio?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Given an original message, determine the cipher that will produce the encoded string that comes earliest...
- Design a combination of identical capacitors, each with capacitance C, for which the equivalent capacitance is...
- Come-Clean Corporation produces a variety of cleaning compounds and solutions for both industrial and household use....
- Which of the following is not an advantage of decentralization? Lower level managers are trained for...
- 1. A mole of X reacts at a constant pressure of 43.0 atm via the reaction...
- Why was the U.S. trying to spread our influence to other nations? Could we have still...
- For the past several weeks you have addressed several different areas of telecommunications and information technology...
ADVERTISEMENT