Question
In: Finance
1. Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Recession 0.35 −9.0%...
1.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | −9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | −6.5% |
Determine the mean return for the stock fund. Use the excel spreadsheet template.
2.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | −9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | −6.5% |
Determine the mean return for the bond fund.
3.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | −9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | −6.5% |
Find the standard deviation of returns on the stock fund.
4.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | −9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | −6.5% |
Find the standard deviation of returns bond fund.
5.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | −9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | −6.5% |
Determine the mean return on a combined portfolio (stocks “s” and bonds “b”) that consists of 50% in the stock fund and 50% in the bond fund.
6.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | −9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | −6.5% |
Calculate the standard deviation of the combined portfolio.
7.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | −9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | −6.5% |
Calculate the correlation of the combined portfolio.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Recession 0.35 −9.0% 5.0%...
Stock
Fund
Bond
Fund
Scenario
Probability
Rate
of Return
Rate
of Return
Recession
0.35
−9.0%
5.0%
Normal
0.40
6.0%
7.5%
Boom
0.25
28.0%
−6.5%
Calculate the correlation of the combined
portfolio. Use the excel spreadsheet template.
Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe recession 0.05 ...
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.05
−38%
−14%
Mild recession
0.25
−6%
10%
Normal growth
0.45
16%
4%
Boom
0.25
40%
4%
b.
Calculate the values of expected return and variance for the
stock fund. (Do not round intermediate calculations. Enter
"Expected return" value as a...
Consider the following table: Scenario Probability Stock Fund-Rate of Return Bond Fund-Rate of return Severe recession...
Consider the following table:
Scenario
Probability
Stock Fund-Rate of Return
Bond Fund-Rate of return
Severe recession
0.15
-34%
-10%
Mild Recession
0.25
-18.5%
6%
Normal Growth
0.25
14%
7%
Boom
0.35
45%
-3%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
Mean return
________%
Variance
__________%-Squared
b. Calculate the value of the covariance
between the stock...
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.10
–43
%
–10
%
Mild recession
0.20
–23
%
16
%
Normal growth
0.40
28
%
9
%
Boom
0.30
33
%
–6
%
a.Calculate the values of mean return and variance
for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 2 decimal places.)
b.Calculate the value of the covariance...
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.05
−41%
−18%
Mild recession
0.20
−11.0%
14%
Normal growth
0.30
8%
5%
Boom
0.45
34%
6%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
b. Calculate the value of the covariance between
the stock and bond funds....
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock
Fund
Bond Fund
Scenario
Probability
Rate of
Return
Rate of
Return
Severe recession
0.10
?30%
?11%
Mild recession
0.15
?12%
8%
Normal growth
0.35
6%
2%
Boom
0.40
39%
5%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
Mean return
_______ %
Variance
________
b. Calculate the value of the covariance...
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.05
–25
%
–10
%
Mild recession
0.25
–5
%
16
%
Normal growth
0.40
10
%
9
%
Boom
0.30
15
%
–6
%
a.Calculate the values of mean return and variance
for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 2 decimal places.)
b.Calculate the value of the covariance...
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.10
−32%
−17%
Mild recession
0.15
−22.0%
15%
Normal growth
0.35
14%
6%
Boom
0.40
35%
4%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
PLEASE USE EXCEL AND PROVIDE FORMULA VIEW
Consider the following table:
Stock Fund...
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.05
−46%
−16%
Mild recession
0.20
−22.0%
11%
Normal growth
0.30
5%
2%
Boom
0.45
42%
5%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
b. Calculate the value of the covariance between
the stock and bond funds....
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
.10
–37%
–9%
Mild recession
.20
–11%
15%
Normal growth
.35
14%
8%
Boom
.35
30%
–5%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
Mean return
%
Variance
b. Calculate the value of the covariance between
the...
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