Question

In: Finance

Given the following probability distribution, what is the expected return for Security J? (Expresss your answer...

Given the following probability distribution, what is the expected return for Security J? (Expresss your answer in percentage, but do not include the percent sign, %, and round it to two decimal place, i.e., 14.67) State Pi rJ 1 0.1 7% 2 0.5 11% 3 0.4 20%

Solutions

Expert Solution

Expected return = Probability * Return

Expected return = (0.1 * 0.07) + (0.5 * 0.11) + (0.4 * 0.20)

Expected return = 0.1420 or 14.20%

jeff jeffy answered 3 years ago
Next > < Previous

Related Solutions

Q: What is the expected return for a security given the following information?
Q: What is the expected return for a security given the following information? • 6.75% • 9.50% • 16.75% • 18.25% • 21.50%
Expected Returns: Discrete Distribution The market and Stock J have the following probability distributions: Probability rM...
Expected Returns: Discrete Distribution The market and Stock J have the following probability distributions: Probability rM rJ 0.3 12% 21% 0.4 10 4 0.3 17 12 a.Calculate the expected rate of return for the market. Round your answer to two decimal places. % b. Calculate the expected rate of return for Stock J. Round your answer to two decimal places. % c. Calculate the standard deviation for the market. Round your answer to two decimal places. % d. Calculate the...
Expected Returns: Discrete Distribution The market and Stock J have the following probability distributions: Probability rM...
Expected Returns: Discrete Distribution The market and Stock J have the following probability distributions: Probability rM rJ 0.3 14% 18% 0.4 9 7 0.3 19 12 Calculate the expected rate of return for the market. Round your answer to two decimal places. % Calculate the expected rate of return for Stock J. Round your answer to two decimal places. % Calculate the standard deviation for the market. Do not round intermediate calculations. Round your answer to two decimal places. %...
Given the following information, please estimate the expected return and risk for the portfolio Security Security...
Given the following information, please estimate the expected return and risk for the portfolio Security Security 1 Security 2 Security 3 E(R) 0.015 0.02 0.05 Weight 33% 33% 34% Security 1 Security 2 Security 3 Security 1 Var=0.05 Corr=0.5 Corr=0.3 Security 2 Var=0.06 Corr=0.6 Security 3 Var=0.07
Calculate the expected rate of return for Stock J. Round your answer to two decimal places....
Calculate the expected rate of return for Stock J. Round your answer to two decimal places.   % Calculate the standard deviation for the market. Round your answer to two decimal places.   % Calculate the standard deviation for Stock J. Round your answer to two decimal places.   % Probability rM rJ 0.3 16% 22% 0.4 10 3 0.3 17 13 Probability rM rJ 0.3 16% 22% 0.4 10 3 0.3 17 13
Expected return A stock's returns have the following distribution: Demand for the Company's Products Probability of...
Expected return A stock's returns have the following distribution: Demand for the Company's Products Probability of This Demand Occurring Rate of Return If This Demand Occurs Weak 0.2 -44% Below average 0.1 -5    Average 0.5 10   Above average 0.1 25   Strong 0.1 53   1.0 Calculate the stock's expected return. Round your answer to two decimal places. % Calculate the stock's standard deviation. Do not round intermediate calculations. Round your answer to two decimal places. % Calculate the stock's coefficient of...
EXPECTED RETURN A stock's returns have the following distribution: Demand for the Company's Products Probability of...
EXPECTED RETURN A stock's returns have the following distribution: Demand for the Company's Products Probability of This Demand Occurring Rate of Return If This Demand Occurs Weak 0.1 (38%) Below average 0.2 (12)    Average 0.3 12   Above average 0.1 25   Strong 0.3 72   1.0 Calculate the stock's expected return. Round your answer to two decimal places. % Calculate the stock's standard deviation. Do not round intermediate calculations. Round your answer to two decimal places. % Calculate the stock's coefficient of...
What is the expected return for the following stock? (State your answer in percent with one...
What is the expected return for the following stock? (State your answer in percent with one decimal place.) Outcomes Possible returns Probability better 36% 13% same 25% 39% worse 18% 48% 20.37% 23.07% 24.98% 26.42% 28.40% You are holding a stock that has a beta of 2.12 and is currently in equilibrium. The required return on the stock is 12.49%, and the return on the market portfolio is 10.00%. What would be the new required return on the stock if...
Consider the following probability distribution for stocks A and B: State Probability Return on A Return...
Consider the following probability distribution for stocks A and B: State Probability Return on A Return on B 1 .15 8% 8% 2 .2 13% 7% 3 .15 12% 6% 4 .3 14% 9% 5 .2 16% 11% If you invest 35% of your portfolio in stock A, and the rest (65%) in stock B, what would be your portfolio's standard deviation? Please enter your answer in percent rounded to the nearest basis point.
Problem 6-06 Expected Returns: Discrete Distribution The market and Stock J have the following probability distributions:...
Problem 6-06 Expected Returns: Discrete Distribution The market and Stock J have the following probability distributions: Probability rM rJ 0.3 12% 19% 0.4 10 3 0.3 17 11 Calculate the expected rate of return for the market. Round your answer to two decimal places. % Calculate the expected rate of return for Stock J. Round your answer to two decimal places. % Calculate the standard deviation for the market. Do not round intermediate calculations. Round your answer to two decimal...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT