Question
In: Finance
Consider the following table: Scenario Probability Stock Fund-Rate of Return Bond Fund-Rate of return Severe recession...
Consider the following table:
| Scenario | Probability | Stock Fund-Rate of Return | Bond Fund-Rate of return |
| Severe recession | 0.15 | -34% | -10% |
| Mild Recession | 0.25 | -18.5% | 6% |
| Normal Growth | 0.25 | 14% | 7% |
| Boom | 0.35 | 45% | -3% |
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
| Mean return | ________% |
| Variance | __________%-Squared |
b. Calculate the value of the covariance between the stock and bond funds. (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 4 decimal places.)
Covariance __________ %-Squared
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe recession 0.05 ...
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.05
−38%
−14%
Mild recession
0.25
−6%
10%
Normal growth
0.45
16%
4%
Boom
0.25
40%
4%
b.
Calculate the values of expected return and variance for the
stock fund. (Do not round intermediate calculations. Enter
"Expected return" value as a...
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.10
–43
%
–10
%
Mild recession
0.20
–23
%
16
%
Normal growth
0.40
28
%
9
%
Boom
0.30
33
%
–6
%
a.Calculate the values of mean return and variance
for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 2 decimal places.)
b.Calculate the value of the covariance...
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.05
−41%
−18%
Mild recession
0.20
−11.0%
14%
Normal growth
0.30
8%
5%
Boom
0.45
34%
6%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
b. Calculate the value of the covariance between
the stock and bond funds....
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock
Fund
Bond Fund
Scenario
Probability
Rate of
Return
Rate of
Return
Severe recession
0.10
?30%
?11%
Mild recession
0.15
?12%
8%
Normal growth
0.35
6%
2%
Boom
0.40
39%
5%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
Mean return
_______ %
Variance
________
b. Calculate the value of the covariance...
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.05
–25
%
–10
%
Mild recession
0.25
–5
%
16
%
Normal growth
0.40
10
%
9
%
Boom
0.30
15
%
–6
%
a.Calculate the values of mean return and variance
for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 2 decimal places.)
b.Calculate the value of the covariance...
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.10
−32%
−17%
Mild recession
0.15
−22.0%
15%
Normal growth
0.35
14%
6%
Boom
0.40
35%
4%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
PLEASE USE EXCEL AND PROVIDE FORMULA VIEW
Consider the following table:
Stock Fund...
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.05
−46%
−16%
Mild recession
0.20
−22.0%
11%
Normal growth
0.30
5%
2%
Boom
0.45
42%
5%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
b. Calculate the value of the covariance between
the stock and bond funds....
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
.10
–37%
–9%
Mild recession
.20
–11%
15%
Normal growth
.35
14%
8%
Boom
.35
30%
–5%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
Mean return
%
Variance
b. Calculate the value of the covariance between
the...
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table: Stock Fund Bond Fund Scenario
Probability Rate of Return Rate of Return Severe recession 0.05 –40
% –9 % Mild recession 0.25 –14 % 15 % Normal growth 0.40 17 % 8 %
Boom 0.30 33 % –5 % a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 2 decimal places.) b. Calculate the value of...
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.20
−18%
−18%
Mild recession
0.25
−11.0%
20%
Normal growth
0.25
8%
5%
Boom
0.30
34%
−6%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
Mean return ???
%
Variance ???
%-Squared
b. Calculate the value of the...
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