1. An asset is forecast to have a return of 30% with a probability of .5 (50%) and a return of 10% with a probability of .5 (50%). The expected return is 20%. What is the variance of the returns?

a) 0

b) none of these

c) 0.1

d) 0.01

2. An asset has a variance of .0009. The standard deviation of the asset is:

a) 0

b) 0.3

c) 0.003

d) 0.03

3. Which of the following would typically be considered as an unsystematic risk factor?

a) a major product of the firm, accounting for 80% of its sales, is found to be unsafe and may no longer be sold

b) gross domestic product is forecast to grow more slowly than expected

c) the cost of petroleum is expected to increase significantly

d) the federal government increase corporate tax rates by 20 percentage points

4. An asset with only one possible outcome would

a) have a zero standard deviation

b) have no risk

c) have a zero variance

d) all of these

2. Suppose that the probability that a grant proposal is awarded by a funding agency is 0.3. (a) If, for a particular year, there are 100 proposals submitted to that agency, what is the probability that at most 20 proposals are awarded? Consider any necessary approximation.

The population proportion is 0.28. What is the probability that a sample proportion will be within ±0.04 of the population proportion for each of the following sample sizes? (Round your answers to 4 decimal places.)

(a)n = 100

(b)n = 200

(c)n = 500

(d)n = 1,000

There is a 0.9968 probability that a female lives through the year. The cost of one year premium is $226. If she dies within the year the policy pays %50,000 in death benefit.

A. State the two events representing possible outcomes

B. Calculate the female's expected gain

450 policies are sold in one year. Let x = # of policyholders who die within the year.

C. Calculate the company's total intake from premiums for one year.

D. If the company is to make a profit, state the possible value(s) of x.

E. Find the probability that company makes a profit.

*Please show work, thank you*

The price of Stock A today is 50, and stock B is 100. The probability of a booming, normal, and recessionary economy are 0.2, 0.7, and 0.1 respectively. If the economy is booming, stock’s A price will be 65 and stock B will be 108. If the economy is normal, stock’s A price will be 55 and stock’s B will be 105. If the econ falls into recession, stock’s A price will be 40 and stock’s B will be 102.
a) Calculate the expected return and standard deviation for each stock.
b) Assume you create a portfolio and put 50% of you money in stock A and 50% of you money in stock B. Calculate the portfolio expected return and standard deviation.

Please show formula and steps

Ravinder's Guitar Shop is expected to generate a 30% return in a boom market, a 15% return in a normal market, and a minus 25% (i.e. -25%) return in a recession. There is a 40% probability of a boom market, a 40% probability of a normal market and a 20% probability of a recession. What is (a) the expected return and (b) the standard deviation of Ravinder's Guitar Shop?

1. Life insurance salesman meets his prospective customers separately. At each meeting, he makes the same effort to persuade the prospective client to be insured. The vendor's understanding after a long term in the insurance business is that the probability of persuading the customer to be insured (probability of success) is 0,1. What is the probability in 4 trials to insure one of them?

Life insurance salesman meets his prospective customers separately. At each meeting, he makes the same effort to persuade the prospective client to be insured. The vendor's understanding after a long term in the insurance business is that the probability of persuading the customer to be insured (probability of success) is 0,1. What is the probability in 4 trials to insure one of them?

An insurance company believes that 30% of drivers are careless. The probability that a careless driver will have an accident in any one-year period is 0.4. The probability that a careful driver will have an accident in any one-year period is 0.2. Find the probability that a driver will have an accident next year given that she has had an accident this year.