Question

Stocks Alpha and Beta have returns as depicted below. What is the standard deviation of both...

  1. Stocks Alpha and Beta have returns as depicted below. What is the standard deviation of both stocks? What is the correlation between them?

Event (“State of the World”)

Probability of Event

Alpha Return

Gamma Return

1

11%

-4%

9%

2

18%

4%

-3%

3

17%

16%

8%

4

21%

8%

17%

5

25%

-3%

-1%

6

8%

15%

5%
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Assuming that the population standard deviation is unknown, calculate the 95% confidence interval of the population...
Assuming that the population standard deviation is unknown, calculate the 95% confidence interval of the population mean. The following is the data. Calculating Process should be shown by Excel (Formulas). What formulas in statistics are used? 7 21 23 24 18 16 2 19 11 6 3 13 17 9 5 12 13 17 4 14 15 25 12 24 22 14 14 20 15 11 26 17 21 11 4 13 16 14 13 14 25 23 9 15...
See the expected returns and standard deviation of returns for five restaurant stocks. Which one of...
See the expected returns and standard deviation of returns for five restaurant stocks. Which one of these stocks is most attractive to a risk-averse investor? Why? Stock Return Standard Deviation Super Foods, Inc. 15% 9% Crazy Snacks, Co. 12% 7.8% Jedi Fast Food, Inc. 11% 8.5% Porter’s Dining, Inc. 21% 18% Truman Restaurants 18.5% 12%
The expected return and betas for three stocks are given below: Stock EXPECTED RETURN (%) BETA...
The expected return and betas for three stocks are given below: Stock EXPECTED RETURN (%) BETA A 11 1.4 B 9 1.2 C 10 1.7    Market returns, R m, is 8% and risk-free rate is 3%. Which of the three stocks is undervalued according to the CAPM?
A company has the following returns over the past 30 months: Month Ret.(%) Month Ret.(%) Month...
A company has the following returns over the past 30 months: Month Ret.(%) Month Ret.(%) Month Ret.(%) 1) 3 11   -3 21 -1 2) -16 12 -2 22 -24 3) 31 13 -8 23 -14 4) 33 14 2 24 -19 5) -23 15 35 25 -19 6) -17 16 11 26 33 7) 8 17 -20 27 -18    8) -19 18 15 28 23 9) -13 19 -12 29 6 10 -17 20 17 30 5 What is...
Part A. In the past it has been found that the arrival time have a population...
Part A. In the past it has been found that the arrival time have a population mean value of μ = 13 and a population standard deviation of σ = 6.26. Using the given data, test whether this mean has changed. Use the critical value approach to test the hypothesis. The significance level alpha is set at 0.05 . The original data of time taken is given below. Show the process by using excel (Formulas). Part B. Test the hypothesis...
Derive the standard deviation of the returns on a portfolio that is invested in stocks x,...
Derive the standard deviation of the returns on a portfolio that is invested in stocks x, y, and z , where twenty percent of the portfolio is invested in stock x and 35 percent is invested in Stock z. State of Economy Probability of State of Economy Rate of Return if State Occurs Stock x Stock y Stock z Boom .04 .17 .09 .09 Normal .81 .08 .06 .08 Recession .15 − .24 .02 − .13 1. 6.31 percent 2....
Derive the standard deviation of the returns on a portfolio that is invested in stocks x,...
Derive the standard deviation of the returns on a portfolio that is invested in stocks x, y, and z , where twenty percent of the portfolio is invested in stock x and 35 percent is invested in Stock z. State of Economy Probability of State of Economy Rate of Return if State Occurs Stock x Stock y Stock z Boom .04 .17 .09 .09 Normal .81 .08 .06 .08 Recession .15 − .24 .02 − .13 1. 6.49 percent 2....
Stocks A and B have expected returns of 8% and 10%, and standard deviations of 12%...
Stocks A and B have expected returns of 8% and 10%, and standard deviations of 12% and 18%, respectively. Calculate the expected return and standard deviation of equally weighted portfolios of the two stocks if the correlation between the two stocks is 0.5? Repeat the calculation for correlation of 0 and ?0.5. If you could set the correlation between the two stocks, which of the three values would you choose? Explain.
The standard deviation of a stock’s returns is 24% and the correlation of its returns with...
The standard deviation of a stock’s returns is 24% and the correlation of its returns with the returns of the market portfolio is 0.4. The standard deviation of the returns of the market portfolio is 16%. The expected return of the market portfolio is 11% and the risk-free rate of return is 3%. The stock is currently priced at $45 and you expect the price to be $50 in one year. The stock is not expected to pay any dividends...
1. Two stocks have the following possible outcomes:             Outcome Probability Stock W Market Stock X...
1. Two stocks have the following possible outcomes:             Outcome Probability Stock W Market Stock X 1 .15 +2% +7% +25% 2 .15 +18% +4% +10% 3 .40 +9% +8% +14% 4 .15 -12% -9% +3% 5 .15 +8% -2% -10% a. What is the expected return for each stock and the Market? b. What is the standard deviation for each stock and the Market? c. What is the correlation between the stocks, and each stock and the Market? d....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT