Question
In: Finance
Risk and return You are considering an investment in the stock market and have identified three...
Risk and return
You are considering an investment in the stock market and have identified three potential stocks, they are Crown (ASX: CWN), Tencent (HKG: 0700), and Commonwealth Bank (ASX: CBA). The historical prices for the past 10 years are shown in the table below. Assume no dividend is distributed during this period.
|
Year |
Crown |
Tencent |
Commonwealth (CBA) |
|
2010 |
7.76 |
29.04 |
53.63 |
|
2011 |
8.57 |
40.40 |
52.15 |
|
2012 |
8.09 |
37.94 |
50.39 |
|
2013 |
11.59 |
54.28 |
64.10 |
|
2014 |
16.68 |
108.70 |
73.83 |
|
2015 |
13.61 |
132 |
88.85 |
|
2016 |
12.27 |
144.90 |
78.67 |
|
2017 |
11.4 |
204.40 |
81.66 |
|
2018 |
13.25 |
463.60 |
78.87 |
|
2019 |
11.95 |
346 |
69.91 |
- Calculate the standard deviation of the Crown, Tencent, and CBA.
Solutions
Expert Solution
S.D.= Square Root of Square of Deviations aroound Mean/No.of Observations
S.D. of Crown=21.97%
S.D. of Tencent= 45.73%
S.D. of Common Wealth Bank=13.17%
No. of observations=9
jeff jeffy answered 1 year agoRelated Solutions
Risk and return You are considering an investment in the stock market and have identified three...
Risk and return
You are considering an investment in the stock market and have
identified three potential stocks, they are Crown (ASX: CWN),
Tencent (HKG: 0700) and Commonwealth Bank (ASX: CBA). The
historical prices for the past 10 years are shown in the table
below. Assume no dividend is distributed during
this period.
Year
Crown
Tencent
Commonwealth (CBA)
2010
7.76
29.04
53.63
2011
8.57
40.40
52.15
2012
8.09
37.94
50.39
2013
11.59
54.28
64.10
2014
16.68
108.70
73.83
2015
13.61...
Risk and return You are considering an investment in the stock market and have identified three...
Risk and return
You are considering an investment in the stock market and have
identified three potential stocks, they are Crown (ASX: CWN),
Tencent (HKG: 0700), and Commonwealth Bank (ASX: CBA). The
historical prices for the past 10 years are shown in the table
below. Assume no dividend is distributed during
this period.
Year
Crown
Tencent
Commonwealth (CBA)
2010
7.76
29.04
53.63
2011
8.57
40.40
52.15
2012
8.09
37.94
50.39
2013
11.59
54.28
64.10
2014
16.68
108.70
73.83
2015
13.61...
You are considering an investment in the stock market and have identified three potential stocks, they...
You are considering an investment in the stock market and have
identified three potential stocks, they are Crown (ASX: CWN),
Tencent (HKG: 0700) and Commonwealth Bank (ASX: CBA). The
historical prices for the past 10 years are shown in the table
below. Assume no dividend is distributed during
this period.
Year
Crown
Tencent
Commonwealth (CBA)
2010
7.76
29.04
53.63
2011
8.57
40.40
52.15
2012
8.09
37.94
50.39
2013
11.59
54.28
64.10
2014
16.68
108.70
73.83
2015
13.61
132
88.85
2016...
You are considering an investment in the stock market and have identified two potential stocks
Risk and return You are considering an investment in the stock market and have identified two potential stocks, they are Rio Tinto (NYSE: RIO) and Amazon (NASDAQ: AMZN). The year-end historical prices for the years 2010 to 2018 are shown in the table below. YearRio TintoAmazon201048.51125.41201169.48169.64201260.46194.44201356.47264.27201453.15358.69201544.13354.53201624.65587.00201744.79823.48201856.111450.891. Which stocks would you prefer to own? Would every rational investor make the same choice? Explain your answer(s). 2. Calculate the covariance and correlation coefficient between the two stocks. Does it appear that a portfolio consisting of...
You are considering an investment in the stock market and have identified two potential stocks, they...
You are considering an investment in the stock market and have
identified two potential stocks, they are Rio Tinto (NYSE: RIO) and
Amazon (NASDAQ: AMZN). The historical prices for the past 10 years
are shown in the table below. Year Rio Tinto Amazon 2010 48.51
125.41 2011 69.48 169.64 2012 60.46 194.44 2013 56.47 264.27 2014
53.15 358.69 2015 44.13 354.53 2016 24.65 587.00 2017 44.79 823.48
2018 56.11 1450.89 1. Which stocks would you prefer to
own? Would everyone...
The market and Stock A have the following probability distributions: Probability Return on Market Return on...
The market and Stock A have the following probability
distributions:
Probability
Return on Market
Return on Stock A
0.15
15%
18%
0.3
12%
15%
0.55
10%
11%
a. Calculate the expected rates of return for the market and
Stock A.
b. Calculate the standard deviations for the market and Stock
A.
c. Calculate the coefficient of variation for the market and
Stock A.
You are considering the risk-return profile of two mutual funds for investment. The relatively risky fund...
You are considering the risk-return profile of two mutual funds
for investment. The relatively risky fund promises an expected
return of 13% with a standard deviation of 17.9%. The relatively
less risky fund promises an expected return and standard deviation
of 3.3% and 5.4%, respectively. Assume that the returns are
approximately normally distributed. [You may find it useful
to reference the z table.]
a-1. Calculate the probability of earning a
negative return for each fund. (Round "z" value to
2...
You are considering the risk-return profile of two mutual funds for investment. The relatively risky fund...
You are considering the risk-return profile of two mutual funds
for investment. The relatively risky fund promises an expected
return of 13.7% with a standard deviation of 19.3%. The relatively
less risky fund promises an expected return and standard deviation
of 3.3% and 6.6%, respectively. Assume that the returns are
approximately normally distributed. a-1. Calculate the probability
of earning a negative return for each fund. (Round final answer to
4 decimal places.) Probability Riskier fund Less risky fund a-2.
Which...
You are considering the risk-return profile of two mutual funds for investment. The relatively risky fund...
You are considering the risk-return profile of two mutual funds
for investment. The relatively risky fund promises an expected
return of 11.7% with a standard deviation of 20.1%. The relatively
less risky fund promises an expected return and standard deviation
of 4.2% and 6.2%, respectively. Assume that the returns are
approximately normally distributed. [You may find it useful
to reference the z table.]
a-1. Calculate the probability of earning a
negative return for each fund. (Round "z" value to
2...
You are considering the risk-return of two mutual funds for investment. The relatively risky fund promises...
You are considering the risk-return of two mutual funds for
investment. The relatively risky fund promises an expected return
of 14.7% with a standard of 15.6%. The relatively less risky fund
promises an expected return and standard deviation of 6.4% and
3.8%, respectively. Assume that the returns are approximately
normally distributed. Using normal probability calculations and
complete sentences, give your assessment of the likelihood of
getting, on one hand, a negative return and on the other, a return
above 10%...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Write an HTML file for a web page that contains the items below. Use an internal...
- Individual Brief for group project Members will prepare and share with their team a brief (maximum...
- Find a path that traces the circle in the plane y=0 with radius r=2 and center...
- Imagine that you are a reader of a newspaper that has a section that allows ‘letters...
- Please, i need Unique answer, Use your own words (don't copy and paste). *Please, don't use...
- Python Create a move function that is only defined in the base class called Objects. The...
- Two cars collide at an intersection. Car A, with a mass of 1900 kg , is...
ADVERTISEMENT