Question

In: Finance

The market and Stock J have the following probability distributions: Probability rM rJ 0.3 12% 20%...


The market and Stock J have the following probability distributions:

Probability rM rJ
0.3 12% 20%
0.4 8 7
0.3 17 13


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.


Calculate the standard deviation for Stock J. Do not round intermediate calculations. Round your answer to two decimal places.

Solutions

Expert Solution

Solution :

The expected rate of return for the market = 11.90 %
The expected rate of return for Stock J = 12.70 %

The standard deviation for the market = 3.7269 %

= 3.73 % ( when rounded off to two decimal places )

The standard deviation for Stock J = = 5.3861 %

= 5.39 % ( when rounded off to two decimal places )

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

The market and Stock J have the following probability distributions: Probability rM rJ 0.3 16% 22%...
The market and Stock J have the following probability distributions: Probability rM rJ 0.3 16% 22% 0.4 8 7 0.3 20 12 a. Calculate the expected rate of return for the market. Round your answer to two decimal places. a1. Calculate the expected rate of return for Stock J. Round your answer to two decimal place b. Calculate the standard deviation for the market. Do not round intermediate calculations. Round your answer to two decimal places. b2. Calculate the standard...
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. %...
The market and stock A have the following probability distributions: Probability Rm    Ra    .3...
The market and stock A have the following probability distributions: Probability Rm    Ra    .3 15% 20% .4 9% 5% .3 18% 12% Q1. Calculate the expected rates of return for the market and stock A. Q2. Calculate the standard deviation for the market and stock A. Q3. Calculate the coefficient of variation for the market and stock a.
Please solve and explain 15-3     The market and Stock S have the following probability distributions: Probability rm...
Please solve and explain 15-3     The market and Stock S have the following probability distributions: Probability rm rs 0.3 15% 20% 0.4 9 5 0.3 18 12 Calculate the expected rates of return for the market and Stock S. Calculate the standard deviations for the market and Stock S. Calculate the coefficients of variation for the market and Stock S.
The market and Stock A have the following probability distributions: Probability Return on Market Return on...
The market and Stock A have the following probability distributions: Probability Return on Market Return on Stock A 0.15 15% 18% 0.3 12% 15% 0.55 10% 11% a. Calculate the expected rates of return for the market and Stock A. b. Calculate the standard deviations for the market and Stock A. c. Calculate the coefficient of variation for the market and Stock A.
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...
The following probability distributions of returns for two stocks have been estimated: Probability Stock A Stock...
The following probability distributions of returns for two stocks have been estimated: Probability Stock A Stock B 0.3 12% 8% 0.4 8 4 0.3 6 3 What is the coefficient of variation for the stock that is less risky (assuming you use the coefficient of variation to rank riskiness). 0.66 3.62 5.16 0.28 0.19
The following probability distributions of returns for two stocks have been estimated: Probability; Stock A; Stock...
The following probability distributions of returns for two stocks have been estimated: Probability; Stock A; Stock B 0.3; 12%; 5% 0.4; 8; 4 0.3; 6; 3 What is the coefficient of variation for the stock that is less risky (assuming you use the coefficient of variation to rank riskiness). 3.62 0.28 0.66 5.16 0.19
Stocks X and Y have the following probability distributions of expected future returns: Probability      X      Y            0.3 &nb
Stocks X and Y have the following probability distributions of expected future returns: Probability      X      Y            0.3      2%      25%       0.4      12%      20%       0.3      20%      0%       One investor invests 40% in stock X and 60% in stock Y. Calculate the expected return, standard deviation, and coefficient of variation Stocks X and Y. Compute the expected rate of return for the portfolio.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT