Question
In: Finance
In the next year, there is a 40% chance of a bear market, and a 60%...
In the next year, there is a 40% chance of a bear market, and a 60% change of a bull market. Over the next year:
Debt will realize a 0% return in a bear market, and a 6% return
in a bull market.
Equity will realize a -10% return in a bear market, and a 20%
return in a bull market.
What is the covariance of debt and equity? (decimal number, 4
decimal places)
Solutions
jeff jeffy answered 1 year agoRelated Solutions
In the next year, there is a 40% chance of a bear market, and a 60%...
In the next year, there is a 40% chance of a bear market, and a
60% change of a bull market. Over the next year:
Debt will realize a 0% return in a bear market, and a 6% return
in a bull market.
Equity will realize a -10% return in a bear market, and a 20%
return in a bull market
What is the correlation of debt and equity? (decimal number, 3
decimal places)
In the following year, there is a 10% chance of a bear market, a 20% chance...
In the following year, there is a 10% chance of a bear market, a
20% chance of a bull market, and a 70% chance of a neutral
market.
Debt will return -2%, 5%, and 5% in the bear, bull and neutral
market, respectively.
Equity will return -15%, 15%, and 8% in the bear, bull and neutral
market , respectively .
What is the expected return of debt in %? (round to 1
decimal place)
What is the volatility of equity in...
If a stock has a 30% chance of losing 18%, a 40% chance of losing only...
If a stock has a 30% chance of losing 18%, a 40% chance of
losing only 3%, and a 30% chance of making 15%, what is the
expected return of this stock?
-2.10%
7.25%
11.10%
-7.25%
In a SINGLE day I have a 60% chance of making 0 sales, 30% chance of...
In a SINGLE day I have a 60% chance of making 0 sales, 30%
chance of making 1 sale
and 10% chance of making 2 sales.
(a) Write out the PDF for the number of sales made in TWO
days
The economy has a 10 percent chance of booming, 60 percent chance of being normal, and...
The economy has a 10 percent chance of booming, 60 percent
chance of being normal, and 30 percent chance of going into a
recession. A stock is expected to return 16 percent in a boom, 11
percent in a normal, and lose 8 percent in a recession. The return
on real estate is 10% in a normal and a boom, and -10% in a
recession. What is the correlation between the return of the stock
and the return of real...
A new business opportunity has a 70% chance of being worth $500,000 next year and a...
A new business opportunity has a 70% chance of being worth
$500,000 next year and a 30% chance of being worth $100,000. The
appropriate expected rate of return is 10%. Assume that the new
opportunity will be financed with a $150,000 bank loan. What is the
maximum amount of his own money that an owner should be willing to
invest in this business?
A) $215,000
B) $195,455
C) $345,455
D) $230,000
Rosa, who has a 10% chance of getting sick in the next year. If she gets...
Rosa, who has a 10% chance of getting sick in the next year. If
she gets sick, her medical bills will amount to $1900. She has a
wealth of $10,000. Suppose she has the utility function ?(?) = √ ?,
where x is her net wealth at the end of the year.
6. Calculate Rosa’s risk premium. (a) $5 (b) $7 (c) $9 (d) $11
(e) None of the above
7. What is the most that Rosa is willing to...
Dystopia county has three bridges. In the next year, the Elder bridge has a 13% chance...
Dystopia county has three bridges. In the next year, the Elder
bridge has a 13% chance of collapse, the Younger bridge has a 7%
chance of collapse, and the Ancient bridge has a 21% chance of
collapse. What is the probability that exactly one of these bridges
will collapse in the next year? (Round your final answer to four
decimal places. Do not round intermediate calculations.)
ABC Inc.'s stock has a 30% chance of producing a 10% return, a 40% chance of...
ABC Inc.'s stock has a 30% chance of
producing a 10% return, a 40% chance of
producing a 0% return, and a 30%
chance of producing a -5% return. What is the firm's
expected rate of return?
Water Cost (in$) Number of house (fi) 20 -<40 16 40 -< 60 9 60 -<...
Water Cost (in$)
Number of house (fi)
20 -<40
16
40 -< 60
9
60 -< 80
12
80 - < 100
10
Total
47
1.Calculate the mean cost of water.
2.Calculate the variance.
3.Calculate the mode
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Use the bond term's below to answer the question Maturity 7 years Coupon Rate 4% Face...
- What experience have you had with Organization Development or with Change Management? Describe the organization, the...
- 1. Renfro Rentals has issued bonds that have a 12% coupon rate, payable semiannually. The bonds...
- Given an array of positive integers a, your task is to calculate the sum of every...
- Define “culture.” Software is defined by the Merriam-Webster Dictionary as "the programs that run on a...
- In humans, hypotrichosis (sparse body hair) is a rare autosomal recessive condition. Let h = hypotrichosis...
- Increase all of the listing prices by 5% for all listings under $500,000 and 10% for...
ADVERTISEMENT