Question

In: Finance

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?

Expert Solution

jeff jeffy answered 1 year ago

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