Question

Consider the following information: |

Rate of Return if State Occurs | |||

State of Economy | Probability of State of Economy | Stock A | Stock B |

Recession | .10 | .05 | –.23 |

Normal | .60 | .08 | .14 |

Boom | .30 | .13 | .32 |

Calculate the standard deviation for Stock A. |

Calculate the standard deviation for Stock B. |

Answer #1

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.

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
State of Economy
Stock A
Stock B
Stock C
Boom
.15
.32
.42
.33
Good
.45
.19
.13
.12
Poor
.30
–.05
–.08
–.06
Bust
.10
–.16
–.28
–.09
Your portfolio is invested 30 percent each in A and C, and 40
percent in B. What is the expected return of the portfolio?
What is the variance of this portfolio?
What...

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 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
Probability of
Economy
State of Economy
Stock A
Stock B
Recession
.20
.08
−
.15
Normal
.50
.11
.14
Boom
.30
.16
.31
a.
Calculate the expected return for Stocks A and B. (Do
not round intermediate calculations and enter your answers as a
percent rounded to 2 decimal places, e.g., 32.16.)
b.
Calculate the standard deviation for Stocks A and B. (Do
not round intermediate...

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
–.19
Normal
.60
.09
.15
Boom
.30
.15
.31
Calculate the expected return for Stock A.
10.30%
9.35%
10.82%
9.28%
10.71%
Calculate the expected return for Stock B.
16.40%
9.00%
17.22%
15.58%
17.06%
Calculate the standard deviation for Stock A.
3.41%
2.41%
3.58%
3.24%
3.54%
Calculate the standard deviation for...

1. Consider following information:
Probability of the state of economy
Rate of return if state occurs
Stock SSS
Recession
0.1
4 %
Normal
0.5
10 %
Boom
0.4
12.1 %
Calculate the expected return of a stock. Express your answer as
%.
2. Consider the same info as before:
Probability of the state of economy
Rate of return if state occurs
Stock SSS
Recession
0.1
4 %
Normal
0.5
10 %
Boom
0.4
12.1 %
Calculate the standard deviation of...

Consider the following information:
Rate of Return if State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Recession
.10
.04
−
.17
Normal
.60
.09
.12
Boom
.30
.17
.27
a.
Calculate the expected return for Stocks A and B. (Do
not round intermediate calculations and enter your answers as a
percent rounded to 2 decimal places, e.g., 32.16.)
b.
Calculate the standard deviation for Stocks A and B.
(Do not round intermediate...

Consider the following information: Rate of Return If State
Occurs State of Probability of Economy State of Economy Stock A
Stock B Recession .17 .08 ? .12 Normal .58 .11 .17 Boom .25 .16 .34
Calculate the expected return for each stock. (Do not round
intermediate calculations. Enter your answers as a percent rounded
to 2 decimal places, e.g., 32.16.) Expected return Stock A % Stock
B % Calculate the standard deviation for each stock. (Do not round
intermediate calculations....

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