1.You have been following a stock for 4 months and the following is its past return...

1.You have been following a stock for 4 months and the following is its past return

Year 1: 5%

Year 2: 16%

Year 3: -1%

Year 4: -2%

What is the expected return based on historical data?

2.You have been following a stock for 3 months and the following is its past return

Year 1: 7%

Year 2: 14%

Year 3: 7%

What is the standard deviation of the stock based on the historical data?

3.Your investment has a 30% chance of earning a 9% rate of return, a 40% chance of earning a 21% rate of return and a 30% chance of earning -3%. What is the standard deviation on this investment?

4.You calculated that the average return of your portfolio is 7% and the standard deviation is 23%, what is the value at risk (VaR) at 5% for your portfolio?

5.The returns of a mutual fund manager for the past 3 years are the following:

Year 1: 7%

Year 2: 11%

Year 3: -2%

What is the geometric average return of the fund for the past three years?

Solutions

Expert Solution

jeff jeffy answered 5 months ago

Next > < Previous

Related Solutions

You have been following a stock for 3 months and the following is its past return...

You have been following a stock for 3 months and the following is its past return Year 1: 7% Year 2: 13% Year 3: -3% What is the standard deviation of the stock based on the historical data? (Put the answer in decimal points instead of percentage)

1. You have been given this probability distribution of the holding period return for KMP stock:...

1. You have been given this probability distribution of the holding period return for KMP stock: State Probability Return 1 30% 20% 2 60% 12% 3 10% -5% What are the expected return and standard deviation for KMP stock? 2. Portfolio A has a beta of 1.5. The market risk premium, RM-Rf, is 4.5%, and the risk-free rate is 4.5%. What is the expected return of the portfolio based on CAPM? 3. Suppose you pay $9,700 for a $10,000 par...

For the past few months, you and your new business partner named Offset, have been working...

For the past few months, you and your new business partner named Offset, have been working on a proposal to close a very difficult business deal with a major clothing retailer. You feel he is key to the successful internal operation of the company and you are delighted that he has agreed to come aboard. As your new partner he has several contacts in the industry who have expressed interest in the NOAH clothing line. You recently inherited $1M from...

Suppose the return for stocks A and B for the last six months have been the...

Suppose the return for stocks A and B for the last six months have been the following: A. B 3,2% 4,7% 4,1% 2,0% -2,7% 1,4% -0,5% -0,8% 6,7% 2,7% 5,5% -1,2% a. What is the expected return, variance and standard deviation of the two stocks? What is the covariance and correlation among them? b. What would the return and standard deviation of a portfolio that is 30% invested in stock A and 70% invested in stock B be?

Imagine that you have been seeing a client for 4 months. During treatment, you learn that...

Imagine that you have been seeing a client for 4 months. During treatment, you learn that he has been 5 years sober but lately has felt an intense sense of anxiety and has requested a referral to a psychiatrist. Upon returning to his counseling sessions, you learn that the psychiatrist has prescribed diazepam, a benzodiazepine. You are aware of the fact that the benzodiazepine functions similarly to alcohol in the body. You are concerned about a relapse because of this...

You have the following information for Stock A and Stock B: Expected rate of return Stock...

You have the following information for Stock A and Stock B: Expected rate of return Stock A: .12 Stock B: .06 Standard deviation: Stock A: .9 Stock B: .5 Correlation between the two stocks: .80 If you invest $600 and $400 in Stock A and Stock B respectively, what is the standard deviation of the portfolio?

2 part problem. The past couple of months have been hard for Doug and Stacy. Their...

2 part problem. The past couple of months have been hard for Doug and Stacy. Their first baby, Ryan, arrived five weeks early. Ryan stayed in the hospital for three weeks after he was born, because there were some issues with his lungs. Nevertheless, the doctors have assured Doug and Stacy that he will be fine. The first month at home has been exciting but stressful, and Doug and Stacy are just beginning to settle into their roles as new...

You have been following Mr. Miller for the past 2 years. You have worked with him,...

You have been following Mr. Miller for the past 2 years. You have worked with him, trying to get him to lose weight by changing his lifestyle and nutritional habits. He continues to be overweight (body mass index [BMI] of 33) and has tried to cut down his carbohydrate and fat intake, but now presents with polyuria, polydipsia, and an elevated random blood sugar of 164. You have ordered an HbA1c test in the past, as he is at high...

Consider the following: You have Stock A and Stock B Expected Return of A is 25% Expected...

Consider the following: You have Stock A and Stock B Expected Return of A is 25% Expected Return of B is 35% Standard Deviation (volatility) of A is 17% Standard Deviation (volatility) of B is 28% a) Calculate the expected return and standard deviation of your portfolio if you invest $4,000 in A and $6,000 in B. The correlation between A and B is 0.40. b) Do you derive any diversification benefits by investing in both A and B? Why or...

Today, you sold 1 share of Litchfield Design stock. The percentage return over the past quarter...

Today, you sold 1 share of Litchfield Design stock. The percentage return over the past quarter (from 3 months ago to today) for these shares was 9.86 percent. You purchased the shares 3 months ago at a price of 111.98 dollars per share. You just received 6.36 dollars in dividends. What was the price of the stock when you sold it?

Subjects