Question

State of Economy Probability of State of Economy Rate of Return if State Occurs Boom 0.04...

State of

Economy

Probability of

State of Economy

Rate of Return

if State Occurs

Boom

0.04

26%

Normal

0.74

17%

Recession

0.22

-44%
  1. What is the expected return on this security? (5 points)
  2. What are the variance and the standard deviation of the returns on this security? (10 points)
  3. Explain what is that the standard deviation measures. (5 points)
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
State of Economy Probability of State of the Economy Security Return if State Occurs Recession .30...
State of Economy Probability of State of the Economy Security Return if State Occurs Recession .30 -8% Normal .40 13% Boom .30 23% Find the standard deviation  of the portfolio
Consider the following information: Rate of Return If State Occurs State of Probability of Economy State...
Consider the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Recession 0.16 0.05 − 0.16 Normal 0.62 0.08 0.13 Boom 0.22 0.13 0.30 Calculate the expected return for the two stocks. (Round your answers to 2 decimal places. (e.g., 32.16)) Expected return Stock A % Stock B % Calculate the standard deviation for the two stocks. I know that Expected Return for Stock A is 8.62% , Expected...
Consider the following information: Rate of Return if State Occurs State of Economy Probability of State...
Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Recession 0.10 0.03 -0.22 Normal 0.60 0.07 0.11 Boom 0.30 0.12 0.34 Required: (a) Calculate the expected return for Stock A. (Do not round your intermediate calculations.) (b) Calculate the expected return for Stock B. (Do not round your intermediate calculations.) (c) Calculate the standard deviation for Stock A. (Do not round your intermediate calculations.) (d) Calculate the...
Consider the following information: Rate of Return if State Occurs State of Economy Probability of State...
Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Recession 0.20 0.04 -0.23 Normal 0.70 0.08 0.14 Boom 0.10 0.14 0.35 Required: (a) Calculate the expected return for Stock A. (Do not round your intermediate calculations.) (b) Calculate the expected return for Stock B. (Do not round your intermediate calculations.) (c) Calculate the standard deviation for Stock A. (Do not round your intermediate calculations.) (d) Calculate the...
Consider the following information:    Rate of Return if State Occurs   State of Economy Probability of...
Consider the following information:    Rate of Return if State Occurs   State of Economy Probability of State of Economy Stock A Stock B   Recession .10 .04 –.21   Normal .50 .09 .15   Boom .40 .15 .35    Calculate the expected return for Stock A. Calculate the expected return for Stock B. Calculate the standard deviation for Stock A.    Calculate the standard deviation for Stock B.
Consider the following information:    Rate of Return if State Occurs   State of Economy Probability of...
Consider the following information:    Rate of Return if State Occurs   State of Economy Probability of State of Economy Stock A Stock B   Recession .20 .04 –.22   Normal .70 .09 .16   Boom .10 .15 .31    Calculate the expected return for Stock A.    Calculate the expected return for Stock B.    Calculate the standard deviation for Stock A.    Calculate the standard deviation for Stock B.
Consider the following information:    Rate of Return if State Occurs   State of Economy Probability of...
Consider the following information:    Rate of Return if State Occurs   State of Economy Probability of State of Economy Stock A Stock B   Recession .10 .06 –.21   Normal .70 .08 .16   Boom .20 .16 .34    Calculate the expected return for Stock A.    Calculate the expected return for Stock B.    Calculate the standard deviation for Stock A.    Calculate the standard deviation for Stock B.
Consider the following information:    Rate of Return if State Occurs   State of Economy Probability of...
Consider the following information:    Rate of Return if State Occurs   State of Economy Probability of State of Economy Stock A Stock B   Recession .10 .04 –.20   Normal .60 .09 .13   Boom .30 .15 .36    Calculate the expected return for Stock A.    Calculate the expected return for Stock B.    Calculate the standard deviation for Stock A.    Calculate the standard deviation for Stock B.
State of Economy Probability of State Return on Asset A in State Return on Asset B...
State of Economy Probability of State Return on Asset A in State Return on Asset B in State Return on Asset C in State Boom 0.35 0.04 0.21 0.3 Normal 0.5 0.04 0.08 0.2 Recession 0.15 0.04 -0.01 -0.26 a.  What is the expected return of each​ asset? b.  What is the variance of each​ asset? c.  What is the standard deviation of each​ asset?
Consider the following information: Rate of Return If State Occurs State of Probability of Economy State...
Consider the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B   Recession .25 .04 –.17   Normal .30 .10 .17   Boom .45 .15 .37 a. Calculate the expected return for the two stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)         Expected return for A %   Expected return for B % b. Calculate...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT