Question
In: Finance
The table below gives statistics relating to two stocks. Mean Annual Return (%) Standard Deviation of...
The table below gives statistics relating to two stocks.
|
Mean Annual Return (%) |
Standard Deviation of Return (%) |
Skewness |
Excess Kurtosis |
|
|
Stock A |
11.5 |
5.5 |
-0.45 |
-0.5 |
|
Stock B |
12.0 |
8.5 |
0.25 |
2.5 |
Based on the information in the table, contrast the distribution of returns of Stock A and B. Evaluate the relative attractiveness of Stock A and B
Solutions
jeff jeffy answered 1 year agoRelated Solutions
The table below gives statistics relating to a hypothetical 10-year record of two portfolios. Mean Annual...
The table below gives statistics relating to a hypothetical
10-year record of two portfolios.
Mean Annual
Return (%)
Standard Deviation
of Return (%)
Skewness
Portfolio A
10.25
23.4
-3.4
Portfolio B
10.25
19.5
4.5
Based only on the information in the above table, perform the
following:
Contrast the distributions of returns of Portfolios A and
B.
Evaluate the relative attractiveness of Portfolios A and
B.
The table below describes the expected return and the standard deviation of the return for Franchises...
The table below describes the expected return and the standard
deviation of the return for Franchises A and B:
Franchise A ($MM)
Franchise B ($MM)
Expected Return
10
20
Standard Deviation
20
30
Franchise A is _____ Franchise B in terms of total risk.
riskier than
less risky than
as risky as
None of the above
Create a portfolio using the two stocks and information below: Expected Return Standard Deviation Weight in...
Create a portfolio using the two stocks and information
below:
Expected Return
Standard Deviation
Weight in Portfolio
Stock A
34.00%
19.00%
90.00%
Stock B
9.00%
38.00%
10.00%
----------------------
----------------------
----------------------
----------------------
Correlation (A,B)
0.1500
----------------------
----------------------
(Do not round intermediate calculations. Record your
answers in decimal form and round your answers to 4 decimal places.
Ex. x.xxxx)
What is the variance of A?
What is the variance of B?
What is the Correlation (A,A)?
What is the Correlation (B,B)?
What...
Create a portfolio using the two stocks and information below: Expected Return Standard Deviation Weight in...
Create a portfolio using the two stocks and information
below:
Expected Return
Standard Deviation
Weight in Portfolio
Stock A
33.00%
14.00%
81.00%
Stock B
24.00%
25.00%
19.00%
----------------------
----------------------
----------------------
----------------------
Correlation (A,B)
0.9600
----------------------
----------------------
(Do not round intermediate calculations. Record your
answers in decimal form and round your answers to 4 decimal places.
Ex. x.xxxx)
What is the variance of A?
What is the variance of B?
What is the Correlation (A,A)?
What is the Correlation (B,B)?
What...
Create a portfolio using the two stocks and information below: Expected Return Standard Deviation Weight in...
Create a portfolio using the two stocks and information
below:
Expected Return
Standard Deviation
Weight in Portfolio
Stock A
35.00%
11.00%
78.00%
Stock B
26.00%
30.00%
22.00%
----------------------
----------------------
----------------------
----------------------
Correlation (A,B)
0.8900
----------------------
----------------------
(Do not round intermediate calculations. Record your
answers in decimal form and round your answers to 4 decimal places.
Ex. x.xxxx)
What is the variance of A?
What is the variance of B?
What is the Correlation (A,A)?
What is the Correlation (B,B)?
What...
Create a portfolio using the two stocks and information below: Expected Return Standard Deviation Weight in...
Create a portfolio using the two stocks and information
below:
Expected Return
Standard Deviation
Weight in Portfolio
Stock A
8.00%
11.00%
42.00%
Stock B
9.00%
32.00%
58.00%
----------------------
----------------------
----------------------
----------------------
Correlation (A,B)
0.1300
----------------------
----------------------
(Do not round intermediate calculations. Record your
answers in decimal form and round your answers to 4 decimal places.
Ex. x.xxxx)
What is the variance of A?
What is the variance of B?
What is the Correlation (A,A)?
What is the Correlation (B,B)?
What...
Create a portfolio using the two stocks and information below: Expected Return Standard Deviation Weight in...
Create a portfolio using the two stocks and information
below:
Expected Return
Standard Deviation
Weight in Portfolio
Stock A
21.00%
28.00%
19.00%
Stock B
23.00%
10.00%
81.00%
----------------------
----------------------
----------------------
----------------------
Correlation (A,B)
0.0500
----------------------
---------------------
(Do not round intermediate calculations. Record your
answers in decimal form and round your answers to 4 decimal places.
Ex. x.xxxx)
What is the Correlation (A,A)?
What is the Correlation (B,B)?
What is the Covariance (A,A)?
What is the Covariance (A,B)?
What is the...
9. Compute the average annual return and standard deviation of an evenly weighted portfolio of stocks...
9. Compute the average annual return and standard deviation of
an evenly weighted portfolio of stocks and 10-year government bonds
over the past five years ended December 31, 2018?
Consider the following table, which gives a security analyst’s expected return on two stocks in two...
Consider the following table, which gives a security analyst’s
expected return on two stocks in two particular scenarios for the
rate of return on the market:
Market Return
Aggressive Stock
Defensive Stock
5
%
–3
%
4
%
24
36
9
a. What are the betas of the two stocks?
(Do not round intermediate calculations. Round your answers
to 2 decimal places.)
Agressive stock:
Defensive stock
b. What is the expected rate of return on each
stock if the two...
Consider the following table, which gives a security analyst’s expected return on two stocks in two...
Consider the following table, which gives a security analyst’s
expected return on two stocks in two particular scenarios for the
rate of return on the market:
Market Return
Aggressive Stock
Defensive Stock
6
%
–4
%
3
%
21
34
9
a. What are the betas of the two stocks?
(Do not round intermediate calculations. Round your answers
to 2 decimal places.)
Beta
Aggressive stock
Defensive stock
b. What is the expected rate of return on each
stock if the...
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