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.
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...
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 –40
% –9 % Mild recession 0.25 –14 % 15 % Normal growth 0.40 17 % 8 %
Boom 0.30 33 % –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 2 decimal places.) b. Calculate the value of...
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