Question
In: Finance
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard
deviation.
Use the following information to answer the questions.
|
State of Economy |
Probability of State |
Return on Asset J in State |
Return on Asset K in State |
Return on Asset L in State |
||||||
|
Boom |
0.25 |
0.065 |
0.230 |
0.260 |
||||||
|
Growth |
0.36 |
0.065 |
0.140 |
0.210 |
||||||
|
Stagnant |
0.23 |
0.065 |
0.065 |
0.055 |
||||||
|
Recession |
0.16 |
0.065 |
-0.080 |
−0.210 |
||||||
a. What is the expected return of asset J?
_____
(Round to four decimal places.)
What is the expected return of asset K?
________
(Round to four decimal places.)
What is the expected return of asset L?
_______
(Round to four decimal places.)
b. What is the variance of asset J?
______
(Round to four decimal places.)
What is the variance of asset K?
_______
(Round to four decimal places.)
What is the variance of asset L?
_________
(Round to four decimal places.)
What is the standard deviation of asset J?
_______
(Round to four decimal places.)
What is the standard deviation of asset K?
_______
(Round to four decimal places.)
What is the standard deviation of asset L?
________
(Round to four decimal places.)
c. What is the expected return of a portfolio with
11 % in asset J, 52 % in asset K, and 37 % in asset L? _____
(Round to four decimal places.)
d. What is the portfolio's variance using the same asset weights from part
(c )?______
(Round to four decimal places.)
What is the portfolio's standard using the same asset weights from part
(c )? ______
(Round to four decimal places.)
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard deviation. Use
the following information to answer the questions.
State of
Economy
Probability
of State
Return on
Asset R in
State
Return on
Asset S in
State
Return on
Asset T in
State
Boom
0.29
0.035
0.300
0.470
Growth
0.36
0.035
0.140
0.330
Stagnant
0.21
0.035
0.180
0.035
Recession
0.14
0.035
−0.035
−0.160
a. What is the expected return of each
asset?
b. What are the variance and the standard
deviation of each asset?
c. What...
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard deviation.
Use the following information to answer the questions.
State of
Economy
Probability
of State
Return on Asset J in
State
Return on Asset K in
State
Return on Asset L in
State
Boom
0.24
0.055
0.210
0.290
Growth
0.38
0.055
0.130
0.190
Stagnant
0.22
0.055
0.030
0.070
Recession
0.16
0.055
−0.090
−0.220
a. What is the expected return of each asset?
b. What is the variance and the standard deviation of each
asset?
c. What...
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard deviation.
Use the following information to answer the questions.
State of
Economy
Probability
of State
Return on
Asset R in
State
Return on
Asset S in
State
Return on
Asset T in
State
Boom
0.29
0.020
0.300
0.450
Growth
0.38
0.020
0.140
0.300
Stagnant
0.22
0.020
0.170
0.015
Recession
0.11
0.020
−0.030
−0.165
a. What is the expected return of each asset?
b. What are the variance and the standard deviation of each
asset?
c. What...
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard deviation.
Use the following information to answer the questions.
State of
Economy
Probability
of State
Return on
Asset A in
State
Return on
Asset B in
State
Return on
Asset C in
State
Boom
0.34
0.02
0.22
0.35
Normal
0.52
0.02
0.09
0.23
Recession
0.14
0.02
−0.02
−0.21
a. What is the expected return of each asset?
b. What is the variance of each asset?
c. What is the standard deviation of each asset?
Hint: Make...
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard deviation.
Use the following information to answer the questions.
State of
Economy
Probability
of State
Return on
Asset D in
State
Return on
Asset E in
State
Return on
Asset F in
State
Boom
0.34
0.07
0.29
0.17
Normal
0.54
0.07
0.19
0.13
Recession
0.12
0.07
−0.24
−0.05
a. What is the expected return of each asset?
b. What is the variance of each asset?
c. What is the standard deviation of each asset?
Expected return and standard deviation. Use the following information to answer the questions. State of Economy...
Expected return and standard
deviation.
Use the following information to answer the questions.
State of
Economy
Probability
of State
Return on
Asset D in
State
Return on
Asset E in
State
Return on
Asset F in
State
Boom
0.38
0.08
0.31
0.19
Normal
0.48
0.08
0.17
0.13
Recession
0.14
0.08
−0.22
- 0.04
a. What is the expected return of each asset?
b. What is the variance of each asset?
c. What is the standard deviation of each asset?
Hint:...
Expected return and standard deviation. Use the following information to answer the questions: a. What is...
Expected return and standard deviation. Use the following
information to answer the questions:
a. What is the expected return of each asset?
b. What is the variance and the standard deviation of each
asset?
c. What is the expected return of a portfolio with 8% in
asset J, 46% in asset K, and 46% in asset L?
d. What is the portfolio's variance and standard deviation
using the same asset weights from part (c)?
State of Economy
Probability of State...
Expected return and standard deviation. Use the following information to answer the questions: a. What is...
Expected return and standard deviation. Use the following
information to answer the questions:
a. What is the expected return of each asset?
b. What is the variance of each asset?
c. What is the standard deviation of each asset?
State of Economy Probability of State
Return on Asset A in State Return on Asset B in
State Return on Asset C in State
Boom 0.31 0.02 0.25 0.31
Normal 0.48 0.02 0.06 0.17
Recession 0.21 0.02 -0.04 -0.24...
Use the following information to answer the questions. State of Economy Probability of State Return on...
Use the following information to answer the questions.
State of Economy
Probability of State
Return on Asset d in State
Return on Asset e in State
Return on Asset f in State
Boom
0.38
0.06
0.34
0.16
Normal
0.52
0.06
0.15
0.12
Recession
0.10
0.06
-0.21
-0.09
a. What is the expected return of each asset?
b. What is the variance of each asset?
c. what is the Standard deviation of each asset?
Use the following information to answer the questions. State of Economy Probability of State Return on...
Use the following information to answer the questions.
State of Economy
Probability of State
Return on Asset d in State
Return on Asset e in State
Return on Asset f in State
Boom
0.32
0.07
0.28
0.16
Normal
0.46
0.07
0.19
0.08
Recession
0.22
0.07
-0.21
-0.07
a. What is the expected return of each asset?
b. What is the variance of each asset?
c. what is the Standard deviation of each asset?
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