Question

Given the following information, what is the expected rate of return and the standard deviation for...

Given the following information, what is the expected rate of return and the standard deviation for this stock?
  

State of Economy Probability of State of Economy Rate of Return
Boom

0.3

0.23

Normal

0.65 0.14
Recession

0.05

-0.36

Homework Answers

Answer #1
State of Economy Probability (P) RETURN (Y) (P * Y ) P * (Y -Average Return of Y)^2
Boom 30% 23 6.90 23.23
Normal 65% 14 9.10 0.03
Recession 5% -36 -1.80 126.00
TOTAL 14.20 149.26
Expected Return = (P * Y)
14.20%
VARIANCE = P * (Y -Average Return of Y)^2
149.2600
Standard Deviation = Square root of (P * (Y -Average Return of Y)^2)
Square root of 149.26
12.22
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Given the following information, what is the expected rate of return and the standard deviation of...
Given the following information, what is the expected rate of return and the standard deviation of a portfolio which is invested 30 percent in stock A, 20 percent in stock B, and 50 percent in stock C? State of Probability of                         Rate of Return if State Occurs              Economy           State of Economy   Stock A              Stock B                  Stock C    Boom                         .10                         .22                    .08                          .18 ..........................................Normal                  .90 .08 .14 .07
Based on the following information, calculate the expected return and standard deviation and variance for two...
Based on the following information, calculate the expected return and standard deviation and variance for two stocks: This is what i have so far and i am stuck if someone can check my work so far and help me fill in the rest thanks State of the Economy   Probability   Rate of Return Stock A   Rate of Return Stock B   Recession .25 .05 -.19 Normal .50 .06 .14 Boom .25 .10 .34 Stock A Probability Return Product Return Deviation Squared Deviation...
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...
Based on the following information, calculate the expected return and standard deviation for Stock A and...
Based on the following information, calculate the expected return and standard deviation for Stock A and Stock B: State Of Economy Prob of State Stock A Stock B Recession 0.20 0.07 -0.05 Normal 0.45 0.09 0.12 Boom 0.35 0.17 0.27
Given the following information, what is the standard deviation for this stock? State of Economy Probability...
Given the following information, what is the standard deviation for this stock? State of Economy Probability Rate of Return Recession 0.10 0.18 Normal 0.50 0.09 Boom 0.40 -0.08
Based on the following information, calculate the expected return and standard deviation for two stocks: State...
Based on the following information, calculate the expected return and standard deviation for two stocks: State of the Economy Probability Rate of Return Stock A Rate of Return Stock B Recession .25 .05 -.19 Normal .50 .06 .14 Boom .25 .10
Given the following information, what is the standard deviation of stock A if it has an...
Given the following information, what is the standard deviation of stock A if it has an expected return of .27% in a boom economy, an expected return of 18% in a good economy, and an expected return of 3% in a recession? The probabilities of boom, normal, recession are 0.2, 0.6, and 0.2, respectively.
Given the following information: State of Economy Probability Rate of Return if State Occurs Stock G...
Given the following information: State of Economy Probability Rate of Return if State Occurs Stock G Rate of Return if State Occurs Stock H Boom 0.3 12% 25% Normal 0.5 15% 10% Recession 0.2 6% -18% Suppose you hold a portfolio with 60% invested in G and 40% invested in H. (1) What is the portfolio’s return if each state of the economy occurs, respectively? (2) What is the portfolio’s expected return? (3) What is the portfolio’s standard deviation?
Given the following information: State of Economy Probability Rate of Return if State Occurs Stock G...
Given the following information: State of Economy Probability Rate of Return if State Occurs Stock G Rate of Return if State Occurs Stock H Boom 0.3 12% 25% Normal 0.5 15% 10% Recession 0.6 6% -18% Suppose you hold a portfolio with 60% invested in G and 40% invested in H. (1) What is the portfolio’s return if each state of the economy occurs, respectively? (2) What is the portfolio’s expected return? (3) What is the portfolio’s standard deviation? Is...
What is the expected return on this stock given the following information? State of the Economy...
What is the expected return on this stock given the following information? State of the Economy Probability E(R) Boom 0.4 15 % Recession 0.6 -20 % Multiple Choice -8.07 percent -6.00 percent -5.20 percent -5.70 percent -7.69 percent A portfolio consists of the following securities. What is the portfolio weight of stock A? Stock #Shares PPS A 200 $ 48 B 100 $ 33 C 250 $ 21 Multiple Choice 0.389 0.451 0.336 0.529 0.445 What is the variance of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT