Question

Syntex, Inc. is considering an investment in one of two common stocks. Given the information that follows, which investment is better, based on the risk (as measured by the standard deviation) and return?

Common Stock A |
Common Stock B |
|||

Probability | Return | Probability | Return | |

0.35 | 12% | 0.25 | -4% | |

0.3 | 14% | 0.25 | 5% | |

0.35 | 21% | 0.25 | 15% | |

0.25 | 20% |

Given the information in the table, the expected rate of return for stock A is??

Answer #1

Calculations-

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(Expected rate of return and risk) Syntex, Inc. is
considering an investment in one of two common stocks. Given the
information that follows, which investment is better, based on
the risk (as measured by the standard deviation) and return?
Common Stock A
Common Stock B
Probability
Return
Probability
Return
0.20
13%
0.25
−4%
0.60
16%
0.25
8%
0.20
18%
0.25
15%
0.25
23%
a. Given the information in the table, the expected rate of
return for stock A is...

Question 7: Smith Inc. is considering an
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calculate the expected rate of return of each investment and its
corresponding standard deviation)
Common Stock A:
Probability Return
0.30 10%
0.40 16%
0.30 18%
Common Stock B:
Probability Return
0.20 -
4%
0.30 6%
0.30 13%
0.20 21%

Syntex Ltd is considering an investment in one of two ordinary
shares. Given the information that follows, which investment is
better, based on the risk (as measured by the standard deviation)
and return?
Share A
Share B
Probability
Return
Probability
Return
0.35
13%
0.15
−4%
0.30
16%
0.35
55%
0.35
20%
0.35
13%
0.15
20%
a. Given the information in the table, the expected rate of
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____%.
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Portfolio B
Probability
Return
Probability
Return
0.15
−3%
0.08
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0.50
17%
0.28
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0.35
23%
0.42
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Problem 8-07
You are considering two stocks and have determined the following
information:
Stock A
Return
Probability of the Return
21
%
20
%
15
20
5
60
Stock B
Return
Probability of the Return
23
%
20
%
14
20
9
60
Which of the two stocks has the higher expected return? Round
your answers to two decimal places.
The return on Stock A: %
The return on Stock B: %
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Consider the following information on Stocks I and II:
RATE OF RETURN IF STATE OCCURS
STATE OF
ECONOMY
PROBABILITY OF
STATE OF ECONOMY
STOCK I
STOCK II
Recession
0.06
-0.35
-0.25
Normal
0.23
0.29
0.23
Irrational exuberance
0.71
0.39
0.29
The market risk premium is 12 percent, and the risk-free rate
is 5.4 percent.
For standard deviations: (Do not include the
percent signs (%). Round your answers to 2 decimal places....

An investor can design a risky portfolio based on two stocks, A
and B. Stock A has an expected return of 21% and a standard
deviation of return of 35%. Stock B has an expected return of 14%
and a standard deviation of return of 21%. The correlation
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You are considering two stocks and have determined the following
information:
Stock A Return Probability of the Return 30 % 10 % 15 50 13
40
Stock B Return Probability of the Return 34 % 25 % 17 15 6
60
Which of the two stocks has the higher expected return? Round
your answers to two decimal places.
The return on Stock A: 15.7 %
The return on Stock B: 14.65 % Stock A has the higher expected
return.
Which...

An investor is considering to create a portfolio of two stocks,
A (for airline) and E (for energy). Based on data of past two
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Mean
Standard Deviation
Stock
A
8%
10%
Stock
E
14%
20%
The correlation coefficient between
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QUESTION 4
You are considering investing either of the three stocks- A, B
and C. The following table provides the information regarding the
stocks
Returns (in percent)
Probability
Stock A
Stock B
Stock C
0.20
2
-3
5
0.50
10
8
8
?
15
20
12
Based on the above information
Calculate the expected rate of returns and variance for each of
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Calculate the coefficient of variation for each
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