Question
In: Finance
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
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Consider the following expected returns, volatilities, and correlations: Stock Expected Return Standard Deviation Correlation with duke...
Consider the following expected returns, volatilities, and
correlations:
Stock
Expected Return
Standard Deviation
Correlation with duke energy
Correlation With Microsoft
Correlation With Walmart
Duke Energy
15%
5%
1
-1
0
Microsoft
44%
24%
-1
1
0.7
Walmart
23%
14%
0
0.7
1
a. Consider a portfolio consisting of only Duke Energy and
Microsoft. What is the percentage of your investment (portfolio
weight) that you would place in Duke Energy stock to achieve a
risk-free investment? b. What is the expected...
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:...
You are given the following information on two securities. Security Expected Return Standard Deviation of Returns...
You are given the following information on two securities.
Security
Expected Return
Standard Deviation of Returns
A
10.0%
14.0%
B
16.0%
12.0%
The correlation between the returns on the two securities is
+0.6. The standard deviation of returns of a portfolio earning an
expected return of 14.0 percent is closest to:
Group of answer choices
A 11.4%.
B 9.3%.
C 27.1%.
D 12.7%.
1 - What is the range, expected rate of return, variance, and standard deviation of the...
1 - What is the range, expected rate of return, variance, and
standard deviation of the information below?
Economic Condition
Probability
Expected Return
Better than expected
0.15
0.65
Good
0.25
0.3
Average
0.45
0.15
Poor
0.1
-0.15
Terrible
0.05
-0.35
2 - A stock has a beta of 1.65, risk-free rate of return of
0.04, and a market risk premium of 0.15. What is the required rate
of return?
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