Question

The returns of stock A for each of the past 4 years are 0.1, -0.05, 0.12 and -0.03. What is the volatility of returns of stock A?

Answer #1

**IT IS TAKEN AS A SAMPLE STANDARD
DEVIATION**

Stock A and B have the following returns:
Stock A
Stock B
1
0.10
-0.03
2
0.17
0.10
3
0.05
0.05
4
-0.05
0.15
5
-0.08
0.12
a. What are the expected returns of the two stocks?
b. What are the standard deviations of the two stocks?
c. If their correlation is 0.75, what is the expected return and
standard deviation of a portfolio of 35% stock A and 65% Stock
B?

You have the following data on (1) the average annual returns of
the market for the past 5 years and (2) similar information on
Stocks A and B. Which of the possible answers best describes the
historical betas for A and B?
Years Market Stock A Stock B
1 0.03 0.16 0.05
2 -0.05 -0.20 0.05
3 0.01 0.12 0.05
4 -0.10 -0.25 0.05
a. bA < 0; bB = 0
b. bA = 0; bB = -1
c. bA...

Stocks A and B have the following returns:
Stock A
Stock B
1
0.08
0.04
2
0.04
0.03
3
0.13
0.04
4
-0.03
0.03
5
0.07
-0.05
Stocks A and B have the following returns:
Stock A
Stock B
1
0.080.08
0.040.04
2
0.040.04
0.030.03
3
0.130.13
0.040.04
4
negative 0.03−0.03
0.030.03
5
0.070.07
negative 0.05−0.05
a. What are the expected returns of the two stocks?
b. What are the standard deviations of the returns of the two
stocks?
c....

You’ve observed the following returns on Crash-n-Burn Computer’s
stock over the past five years: 4 percent, –15 percent, 26 percent,
19 percent, and 14 percent.
What was the arithmetic average return on the company's stock
over this five-year period?
What was the variance of the company's returns over this
period?
What was the standard deviation of the company’s returns over
this period?

over the past six years, a stock and annual returns of 14%, -3%,
8%, 21%, -16%, and 4%. what is the Standard Deviation of these
returns?
13.05
11.27
15.08
14.40
13.59

Suppose that the short rate is 4% and its real-world process
is:
dr = 0.1(0.05 - r)dt + 0.01dz
While the risk-neutral process is:
dr = 0.1(0.11 - r)dt + 0.01dz
First Question:
What is the market price of interest rate risk?
Second Question: What is the expected return
and volatility for a 5-year
zerocoupon bond in the risk-neutral world?
Third Question: What is the expected return and
volatility for a 5-year zerocoupon bond in the real world?

Stock A and B have the following returns:
Stock A
Stock B
1
0.11
0.07
2
0.04
0.02
3
0.15
0.05
4
-0.04
0.03
5
0.08
-0.03
a. What are the expected returns of the two stocks?
b. What are the standard deviations of the returns of the two
stocks?
c. If their correlation is 0.43, what is the expected return and
standard deviation of a portfolio of 77% Stock A and 23% Stock
B?

4.
A.
A stock had returns of 21.70% (1 year ago), 2.40% (2 years ago),
X (3 years ago), and ‑14.60% (4 years ago) in each of the past 4
years. Over the past 4 years, the geometric average annual return
for the stock was 2.85%. Three years ago, inflation was 3.62% and
the risk-free rate was 4.47%. What was the real return for the
stock 3 years ago? Answer as a rate in decimal format so
that 12.34% would be...

,
Stocks A and B have the following returns:
Stock A
Stock B
1
0.09
0.07
2
0.07
0.04
3
0.12
0.04
4
−0.03
0.02
5
0.08
−0.05
a. What are the expected returns of the two stocks?
b. What are the standard deviations of the returns of the two
stocks?
c. If their correlation is 0.46 ,what is the expected return and
standard deviation of a portfolio of
76% stock A and 24% stock B?
a. What are the...

The following table presents annual returns for B&G stock
over the past four years:
Year
1
2
3
4
Return
7.55%
13.48%
10.15%
1.48%
What is the standard deviation of B&G's returns?

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