Question
In: Finance
Bird Corporation has a 0.1 probability of a return of -0.23, a 0.1 probability of a...
Bird Corporation has a 0.1 probability of a return of -0.23, a 0.1 probability of a rate of return of 0.07, and the remaining probability of a -0.10 rate of return. What is the variance in the expected rate of return of Bird Corporation?
Solutions
Expert Solution
| Probability (P) | Return | P*Return | Deviation form expected return (D) | PD^2 |
| 0.10 | (0.23) | (0.023) | (0.1340) | 0.0018 |
| 0.10 | 0.07 | 0.007 | 0.1660 | 0.0028 |
| 0.80 | (0.10) | (0.080) | (0.0040) | 0.0000 |
Expected Return = 
P*Return
= -.023+.007-.080
= -0.096
= -9.6%
Variance = PD^2
= .0018+.0028+0
= 0.0046
jeff jeffy answered 1 year agoRelated Solutions
state of economy probability return on stock J return on stock K bear 0.23 -0.013 0.041...
state of economy
probability
return on stock J
return on stock K
bear
0.23
-0.013
0.041
normal
0.58
0.145
0.069
bull
0.19
0.225
0.099
Calculate the standard deviation for each of the stocks
Stock J %
Stock K %
A stock’s returns have the following distribution: Probability Stock Return 0.1 –8% 0.8 18% 0.1 47%...
A stock’s returns have the following distribution:
Probability
Stock Return
0.1
–8%
0.8
18%
0.1
47%
The stock’s expected return is 18.3%. Calculate its standard
deviation.
Probability A B 0.1 (7 %) (20 %) 0.1 5 0 0.6 15 21 0.1 22...
Probability
A
B
0.1
(7
%)
(20
%)
0.1
5
0
0.6
15
21
0.1
22
27
0.1
30
48
Calculate the expected rate of return, , for Stock B ( =
14.00%.) Do not round intermediate calculations. Round your answer
to two decimal places.
%
Calculate the standard deviation of expected returns,
σA, for Stock A (σB = 16.74%.) Do not round
intermediate calculations. Round your answer to two decimal places.
%
Now calculate the coefficient of variation for...
Suppose the return on portfolio P has the following probability distribution: Type of market Probability Return...
Suppose the return on portfolio P has the following probability
distribution:
Type of market Probability Return
Bear 0.20 -20%
Normal 0.50 18%
Bull 0.30 50%
Assume that the risk free rate is 5% and the expected return and
standard deviation on the market portfolio M is 0.15 and 0.20,
respectively. The correlation coefficient between portfolio P and
the market portfolio M is 0.80.
1. Is P efficient?
2. What is the beta of portfolio P?
3. What is the alpha...
Two assets' correlation is 0.1. The first has expected return of 9% and standard deviation of...
Two assets' correlation is 0.1. The first has expected return of
9% and standard deviation of 16%, the second has expected return of
13% and standard deviation of 20%.
Calculate the minimum amount of risk (standard deviation) you'll
need to take if investing in these two assets. (Provide your answer
in percent rounded to two decimals omitting the % sign)
Two assets' correlation is 0.1. The first has expected return of 9% and standard deviation of...
Two assets' correlation is 0.1. The first has expected return of
9% and standard deviation of 16%, the second has expected return of
13% and standard deviation of 20%. Calculate the minimum amount of
risk (standard deviation) you'll need to take if investing in these
two assets.
prepare form 4626 for blue bird corporation to determine its 2016 amt liability.blue bird is not...
prepare form 4626 for blue bird corporation to determine its
2016 amt liability.blue bird is not a small corporation and
operates on a year calender.
Taxable income before NOL $963200
AMT informayion:
Intangible drilling costs (12031)
Tax -exempt interest from private activity bonds 22714
Adjusted AMT loss(30015)
Amortization of certified pollution control facilities 55201
Depreciation of post-1986 property74251
Adjusted Current Earnings(ACE)2007013
Prior year positive ACE adjustment in excess of prior year
negative ACE adjustment (4d) 251333
A surgeon performs 5 surgeries in a week. Each surgery has 0.1 probability of developing complications....
A surgeon performs 5 surgeries in a week. Each surgery has
0.1
probability of developing complications. If the surgeries are
independent find:
a. The probability all 5 surgeries develop complications
b. The probability at least one of the surgeries develop
complications.
c. Exactly two of the surgeries develop complications
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.
Consider the following probability distributions for stocks A and B: State Probability Return on A Return...
Consider the following probability distributions for stocks A
and B:
State
Probability
Return on A
Return on B
1
.3
7%
-9%
2
.5
11%
14%
3
.2
-16%
26%
What is the standard deviation of returns for stock A? Please
give your answer in percent rounded to the nearest basis point.
What is the standard deviation of returns for stock B? Please
give your answer in percent rounded to the nearest basis point.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Write a Java Program using the following instruction: Create the following 3 methods that calculate and...
- How would the S/D curves shift if a $3 tax was imposed on suppliers for each...
- Why should a time-based authentication system invalidate the current password on a successful authentication?
- Explain the difference between a market penetration strategy and a market development strategy.
- QUESTION 4 Discuss the sanctity of life versus the quality of life debate as presented by...
- 0.560 g He, 20.482 g F2, and 13.960 g Ar are placed in a 18.4-L container...
- Let X ∼ Pois(4), Y ∼ Pois(12), U ∼ Pois(3) be independent random variables. a) What...
ADVERTISEMENT