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?

Expert Solution

jeff jeffy answered 1 year ago

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

how to calculate standard deviation and coefficient of variance of the expected return of one asset?...

how to calculate standard deviation and coefficient of variance of the expected return of one asset? Of a portfolio? give examples

Problem 1. Stocks offer an expected rate of return of 18%, with a standard deviation of...

Problem 1. Stocks offer an expected rate of return of 18%, with a standard deviation of 22%. Gold offers an expected return of 10% with a standard deviation of 30%. a) In light of the apparent inferiority of gold with respect to both mean return and volatility, would anyone hold gold? If so, demonstrate graphically why one would do so. b) Given the data above, reanswer a) with the additional assumption that the correlation coefficient between gold and stocks equals...

The expected rate of return for Stock A is? The investment's standard deviation for stock A?...

The expected rate of return for Stock A is? The investment's standard deviation for stock A? COMMON STOCK A COMMON STOCK B PROBABILITY RETURN PROBABILITY RETURN 0.20 11% 0.10 -4% 0.60 16% 0.40 7% 0.20 19% 0.40 14% 0.10 22%

Calculate the range, interquartile range, variance, standard deviation and coefficient of variation.

A sample has data values 27, 25, 20, 15, 30, 34, 28, 25. Calculate the range, interquartile range, variance, standard deviation and coefficient of variation.

(TCO 2) Given the data below, calculate the expected return, variance, and standard deviation of the...

(TCO 2) Given the data below, calculate the expected return, variance, and standard deviation of the following company. In a recessionary economy, which is expected to occur with a 30% probability, the expected returns would be -5%. In an expanding economy with an expected probability of occurrence of 20%, the expected return would be 10%. In a normal economy, expected to occur 50% of the time, the expected return would be 5%.

The risk-free rate is 1% while the expected return and standard deviation of the market portfolio...

The risk-free rate is 1% while the expected return and standard deviation of the market portfolio (S&P 500) are 9% and 19%, respectively. (a) What is the standard deviation of a combination of risk-free security and S&P 500 that has an expected return of 12%? What is its probability of loss? Assume that the S&P 500 returns have a normal probability distribution. (b) The optimal allocation to S&P 500 for an investor is 60%. What will be the optimal allocation...

Consider a portfolio that offers an expected rate of return of 12% and a standard deviation...

Consider a portfolio that offers an expected rate of return of 12% and a standard deviation of 21%. T-bills offer a risk-free 6% rate of return. What is the maximum level of risk aversion for which the risky portfolio is still preferred to T-bills? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

10. Security A has an expected rate of return of 10% and a standard deviation of...

10. Security A has an expected rate of return of 10% and a standard deviation of 16%. Security B has an expected rate of return of 8% and a standard deviation of 12%. Let A and B are perfectly negatively correlated. The expected return of a risk-free portfolio formed with A and B is Select one: a. 10% b. 9.47% c. 7.86% d. 8.86%

A portfolio has an expected rate of return of 0.15 and a standard deviation of 0.15....

A portfolio has an expected rate of return of 0.15 and a standard deviation of 0.15. The risk-free rate is 6%. An investor has the following utility function: U = E(r) - (A/2)s 2 . Which value of A makes this investor indifferent between the risky portfolio and the risk-free asset? How would I complete this on a scientific calculator? For example, you cannot put algebra into a scientific calculator. So I'll need to do it manually, is it possible...

Question