Question

Consider the following table:

Stock Fund | Bond Fund | ||

Scenario | Probability | Rate of Return | Rate of Return |

Severe recession | .10 | –37% | –9% |

Mild recession | .20 | –11% | 15% |

Normal growth | .35 | 14% | 8% |

Boom | .35 | 30% | –5% |

**a.** Calculate the values of mean return and
variance for the stock fund. **(Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)**

Mean return | % |

Variance | |

**b.** Calculate the value of the covariance between
the stock and bond funds. **(Negative value should be
indicated by a minus sign. Do not round intermediate calculations.
Round your answer to 4 decimal places.)**

Covariance

Answer #1

Consider the following table:
Stock
Fund
Bond Fund
Scenario
Probability
Rate of
Return
Rate of
Return
Severe recession
0.10
−32%
−17%
Mild recession
0.15
−22%
15%
Normal growth
0.35
14%
6%
Boom
0.40
35%
4%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
Mean return
%
Variance
b. Calculate the value of the covariance between
the...

Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.10
−32%
−10%
Mild recession
0.15
−10.0%
6%
Normal growth
0.35
22%
10%
Boom
0.40
37%
−7%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
Mean return
%
Variance
%-Squared
b. Calculate the value of the covariance between...

Consider the following table:
Stock
Fund
Bond Fund
Scenario
Probability
Rate of
Return
Rate of
Return
Severe recession
0.10
?37%
?9%
Mild recession
0.20
?11%
15%
Normal growth
0.35
14%
8%
Boom
0.35
30%
?5%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 2 decimal places.)
Mean return =
%
Variance =
b. Calculate the value of the covariance...

Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.10
−37%
−10%
Mild recession
0.20
−17%
16%
Normal growth
0.40
22%
9%
Boom
0.30
27%
−6%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 2 decimal places.)
Mean return ???
%
Variance ???
%-Squared
b. Calculate the value of...

Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.20
−38%
−12%
Mild recession
0.20
−26.0%
20%
Normal growth
0.35
8%
3%
Boom
0.25
46%
−7%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
Mean return
%
Variance
%-Squared
b. Calculate the value of the covariance between...

Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.10
−39%
−12%
Mild recession
0.20
−19%
18%
Normal growth
0.40
24%
11%
Boom
0.30
29%
−8%
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 2 decimal places.)
Mean return
%
Variance
%-Squared
b. Calculate the value of the covariance...

Problem 6-7
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.10
−34%
−9%
Mild recession
0.20
−20%
5%
Normal growth
0.30
21%
9%
Boom
0.40
36%
6%
a.
Calculate the values of mean return and variance for the stock
fund. (Do not round intermediate calculations. Round...

Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.05
−44%
−13%
Mild recession
0.25
−16%
11%
Normal growth
0.40
10%
4%
Boom
0.30
30%
3%
b.
Calculate the values of expected return and variance for the
stock fund. (Do not round intermediate calculations. Enter...

Consider the following table:
Stock Fund Bond Fund Scenario Probability Rate of Return Rate of
Return
Severe recession 0.05 –25 % –10 %
Mild recession 0.25 –5 % 16 %
Normal growth 0.40 10 % 9 %
Boom 0.30 15 % –6 %
a.Calculate the values of mean return and variance for the stock
fund. (Do not round intermediate calculations. Round "Mean return"
value to 1 decimal place and "Variance" to 2 decimal places.)
b.Calculate the value of the covariance...

Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.05
–26
%
–11
%
Mild recession
0.25
–6
%
17
%
Normal growth
0.40
11
%
10
%
Boom
0.30
16
%
–7
%
a.Calculate the values of mean return and variance
for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 2 decimal places.)
b.Calculate the value of the covariance...

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