Question
In: Finance
RTF stock is expected to return 10.6 percent if the economy booms and only 4.2 percent...
RTF stock is expected to return 10.6 percent if the economy booms and only 4.2 percent if the economy goes into a recessionary period. The probability of a boom is 55 percent while the probability of a recession is 45 percent. what is the standard deviation of the returns on RTF stock?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
RTF stock is expected to return 11 percent in a normal economy and lose 15 percent...
RTF stock is expected to return 11 percent in a normal economy
and lose 15 percent in recession. The probability of a recession is
33 percent while the probability of a booming economy is zero
percent. What is the variance of the returns on RTF stock?
RTF stock is expected to return 11 percent in a normal economy and lose 15 percent...
RTF stock is expected to return 11 percent in a normal economy
and lose 15 percent in recession. The probability of a recession is
33 percent while the probability of a booming economy is zero
percent. What is the variance of the returns on RTF stock?
If the economy booms, Meyer&Co. stock will have a return of 18.8 percent. If the economy...
If the economy booms, Meyer&Co. stock will have a return of
18.8 percent. If the economy goes into a recession, the stock will
have a loss of 7.9 percent. The probability of a boom is 68 percent
while the probability of a recession is 32 percent. What is the
standard deviation of the returns on the stock?
Stock A is expected to return 12 percent in a normal economy and lose 7 percent...
Stock A is expected to return 12 percent in a normal economy and
lose 7 percent in a recession. Stock B is
expected to return 8 percent in a normal economy and 2 percent
in a recession. The probability of the economy
being normal is 80 percent and the probability of a recession is
20 percent. What is the covariance of these two
securities?
Please SHOW Work Not JUST ExCell Thank You
You own stock with an overall expected return of 18.32 percent. The economy is expected to...
You own stock with an overall expected return of 18.32 percent.
The economy is expected to either boom or be normal. There's a 65
percent chance the economy will boom. If the economy booms, the
stock is expected to return 23 percent. What's the expected return
on the stock if the economy is normal?
A. 8.51%
B. 9.63%
C. 11.84%
D. 10.25%
Please show work.
If the economy is normal, Charleston Freight stock is expected to return 16.5 percent.
If the economy is normal, Charleston Freight stock is expected to return 16.5 percent. If the economy falls into a recession, the stock's return is projected at a negative 11.6 percent. The probability of a normal economy is 80 percent while the probability of a recession is 20 percent. What is the variance of the returns on this stock? A. 0.010346 B. 0.012634 C. 0.013420 D. 0.013927 E. 0.014315
Crabby Shores stock is expected to return 15.7 percent in abooming economy, 9.8 percent in...
Crabby Shores stock is expected to return 15.7 percent in a
booming economy, 9.8 percent in a normal economy, and 2.3 percent
in a recession. The probabilities of an economic boom, normal
state, or recession are 15 percent, 73 percent, and 12 percent,
respectively. What is the expected rate of return on this
stock?Multiple Choice 10.74 percent 10.61 percent 10.07 percent 9.79
percent 8.68 percent
state of the economy probability of occurrence expected return on stock A expected return on stock...
state of the economy
probability of occurrence
expected return on stock A
expected return on stock B
High growth
0.1
60%
5%
Moderate growth
0.2
20%
20%
No growth
0.5
10%
5%
Recession
0.2
-25%
0%
1)Calculate the weighted average of the standard deviation
of individual stocks A and B ; and show that each portfolio
standard deviation is less than this weighted average except the
portfolio standard deviation with correlation of 1.
2) Given correlation of -1, what portfolio...
RTF stock is currently priced at $37.13 a share. The only options on this stock are...
RTF stock is currently priced at $37.13 a share. The only
options on this stock are the March $45 call option, which is
priced at $1.72, and the March $45 put which is priced at $7.99.
Flo would like the option to purchase 300 shares of RTF should the
price suddenly rise as she expects. Her main concern is that the
price will double after hours and she will miss out on some
potential profits. She also realizes the stock...
Expected return of stock Alpha is 8 percent and of stock Beta is12 percent. The...
Expected return of stock Alpha is 8 percent and of stock Beta is
12 percent. The standard deviation of the stocks are 13 percent and
18 percent respectively. The correlation between these two stocks
is 0.4. If the portfolio manager has decided to invest all the
funds that he holdsin some proportion in these two assets. The
expected return ofthe portfolio based on this proportion is 11.5%.
What are the weightsin each of the stocks? What isthe standard
deviationofthisportfolio?
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