HAND CALCULATIONS ONLY. NO EXCEL. You forecast there are three potential scenarios for the economy: a...

HAND CALCULATIONS ONLY. NO EXCEL.

You forecast there are three potential scenarios for the economy: a bull, flat, and bear market. You also estimate the returns for a stock and bond mutual fund as follows:

Economic Scenario	Stock Fund	Bond Fund	Probability of Scenario
Recession	-18%	6%	0.3
Flat	8%	4%	0.45
Boom	20%	-8%	0.25

Using this information, you find for the stock fund: E(r_S)=0.032 and σ_S=0.1469, and for the bond fund: E(r_B)=0.016 and σ_B=0.0561.

Compute the covariance between the stock and bond fund. (Record your answer to at least four decimal places) (10 points)

Compute the correlation coefficient between the stock and bond fund. (Record your answer to at least four decimal places) (10 points)

You put 70% of your portfolio in the stock fund and the remaining 30% in the bond fund.

Compute the standard deviation of your portfolio. (Record your answer to at least four decimal places) (10 points)

Expert Solution

JUST WRITTEN IN EXCEL, OTHERWISE ALL PURE SIMPLE CALCULATIONS. NO EXCEL FUNCTION IS USED. THANK YOU

jeff jeffy answered 1 year ago

For CB output, you should paste the forecast output in your Excel calculations file. Show the...

For CB output, you should paste the forecast output in your Excel calculations file. Show the split view in all CB output. 1. Two investments (A and B, below) have been proposed to the Capital Investment committee of your organization; a. The required rate of return for your company is 15%. What is the NPV for each investment? Assume the initial investments ($150k and $50k) occur at the beginning of the year and all other costs and benefits occur at...

Here are the three scenarios of the state of the economy in a country A: State...

Here are the three scenarios of the state of the economy in a country A: State of Economy Probability Boom 0.2 Normal 0.6 Recession 0.2 Suppose the rates of return of the bond in three scenarios of the economy are 10% in a boom, 5% in a normal period, and -5% in a recession. The stock returns in the three scenarios are 20%, 10%, and -10%, respectively. Asset Allocation (Two-risky-assets Portfolio) Questions: 1. Compute the covariance between the two risky...

analyze the potential success of a claim for negligence under one of the three possible scenarios....

analyze the potential success of a claim for negligence under one of the three possible scenarios. Include a detailed discussion of each element of the negligence claim and why that element is met or not met. Discuss the possible defenses that could be reasonably asserted by the doctor to each claim, and why that defense might apply. Lastly, include a paragraph describing which, if any, claim you believe might be the most successful against the doctor and why. SCENERIO: Following...

There are three goods produced in an economy by three individuals: Good Producer Hand Sanitizer Rabiatu...

There are three goods produced in an economy by three individuals: Good Producer Hand Sanitizer Rabiatu Face Mask Mariya Veronica Bucket Zina If Rabiatu likes only face mask, Mariya likes only veronica buckets and Zina likes only hand sanitizer, will any trade take place between these three persons in barter economy? How will introducing money into the economy benefit these three persons

PLEASE ANSWER IN EXCEL WITH WORK. An investor has projected three possible scenarios for a project...

PLEASE ANSWER IN EXCEL WITH WORK. An investor has projected three possible scenarios for a project as follows: Pessimistic- NOI will be $200,000 the first year, and then decrease 2 percent per year over a five year holding period. The property will sell for 1.8 million after five year. Most Likely- NOI will be level at $200,000 per year for the next five years(level NOI) and the property will sell for 2 million. Optimistic- NOI will be 200,000 the first...

There are three different potential states of the economy next year. The chart below shows you...

There are three different potential states of the economy next year. The chart below shows you the returns for stocks Green and Wave under each potential economic situation, along with the probability of each situation occurring (note that the probabilities are not all the same). These are the only two stocks in the economy. Economic State Probability Green Wave Boom 0.1 13% 7% Average 0.7 3% 6% Bust 0.2 -6% -3% Green and Wave can be combined on a 50/50...

Assume that you live in a simple economy in which only three goods are produced and...

Assume that you live in a simple economy in which only three goods are produced and traded: fish, fruit, and meat. Suppose that on January 1, 2010, fish sold for $3.50 per pound, meat was $4.00 per pound, and fruit was $2.50 per pound. At the end of the year, you discover that the catch was low and that fish prices had increased to $5.00 per pound, but fruit prices stayed at $2.50 and meat prices had actually fallen to...

USING EXCEL IF NEEDED FOR CALCULATIONS You are working in a Paper Company and the company...

USING EXCEL IF NEEDED FOR CALCULATIONS You are working in a Paper Company and the company needs to loan money from a bank to cover for the daily expenses. By analyzing the previous data, you come to the conclusion that the daily expenses are pretty stable at $17,000 per day, and the company works for 305 days a year. A bank has agreed to give you the loan, at an annual interest rate of 9% (i.e. for every dollar that...

. You must use Excel (submit either a pdf, word or Excel file only). . You...

. You must use Excel (submit either a pdf, word or Excel file only). . You must identify the 5 steps (you must address each in detail). Problem: Use the given data to complete a t-test using Excel. Question: Is there a difference in group means between the number of words spelled correctly for two groups of fourth graders? Group Assignment Score 1 3 1 4 1 10 2 14 2 7 2 8 2 10 2 15 2 9...

Calculations must be done in Excel As the financial advisor to Upmarket Car Rentals you are...

Calculations must be done in Excel As the financial advisor to Upmarket Car Rentals you are evaluating the following types of cars to add to the fleet: - Speedster: - A sporty convertible with a cost of $120,000 and a useful life of 4 years. It will produce rental income of $80,000 per year and operating costs of $15,000 per year. A major service is required after 2 years costing $20,000. A salvage value of $30,000 is expected after 4...

Question