Question
You've estimated the following expected returns for a stock, depending on the strength of the economy:...
You've estimated the following expected returns for a stock, depending on the strength of the economy:
State Probability Expected return
Recession 0.1 -0.01
Normal 0.5 0.1
Expansion 0.4 0.15
What is the standard deviation of returns for the stock?
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You've estimated the following expected returns for a stock, depending on the strength of the economy:...
You've estimated the following expected returns for a stock,
depending on the strength of the economy:
State (s)
Probability
Expected return
Recession
0.3
-0.02
Normal
0.5
0.09
Expansion
0.2
0.14
1. What is the expected return for the stock?
2. What is the standard deviation of returns for the stock?
We know the following expected returns for stocks A and B, given different states of the...
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different states of the economy:
State (s)
Probability
E(rA,s)
E(rB,s)
Recession
0.2
-0.05
0.05
Normal
0.5
0.1
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Expansion
0.3
0.18
0.12
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3. What is the standard deviation of returns for stock A?
4. What is the standard deviation of returns for stock B?
) You have estimated the following probability distributions of expected future returns for Stocks X and...
) You have estimated the following probability distributions of
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Probability
Return
0.5
-10
0.4
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Use the following information on states of the economy and stock returns to calculate the standard...
Use the following information on states of the economy and stock
returns to calculate the standard deviation of returns. (Do
not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places.)
State of
Economy
Probability of
State of Economy
Security Return
if State Occurs
Recession
0.45
−5.00
%
Normal
0.40
12.00
Boom
0.15
16.00
Standard Deviation
Use the following information on states of the economy and stock returns to calculate the standard...
Use the following information on states of the economy and stock
returns to calculate the standard deviation of returns. (Do
not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places.)
State of Economy
Probability of
State of Economy
Security
Return
if State Occurs
Recession
0.35
−10.00
%
Normal
0.50
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Boom
0.15
17.00
1. Consider following information: Probability of the state of economy Rate of return if state occurs...
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...
A. Use the following information on states of the economy and stock returns to calculate the...
A.
Use the following information on states of the economy and stock
returns to calculate the expected return for Dingaling Telephone:
(Do not round intermediate calculations. Enter your answer
as a percent rounded to 2 decimal places. Omit the "%" sign in your
response.)
State of
Economy
Probability of
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Security Return
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–5.50
%
Normal
.40
11.00
Boom
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17.00
B.
Use the following information on states of the economy and stock
returns...
Based on your research, the following states of economy, probabilities of states, and returns are forecasted...
Based on your research, the following states of economy,
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state Stock A Stock B Recession 0.65-0.15-0.2 Normal 0.30.130.14
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a.What is the expected return on Stock A?
b.What is the expected return on Stock B?
c.Your research also indicates that stock A’s beta is greater
than stock B’s beta by 0.5. calculate the expected market risk
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Based on your research, the following states of economy, probabilities of states, and returns are forecasted...
Based on your research, the following states of economy,
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Probability of state
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0.65
-0.15
-0.2
Normal
0.3
0.13
0.14
Irrational exuberance
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0.2
0.29
a. What is the expected return on Stock A?
b. What is the expected return on Stock B?
c. Your research also indicates that stock A’s beta is greater
than stock...
Use the following information on states of the economy and stock returns to calculate the standard...
Use the following information on states of the economy and stock
returns to calculate the standard deviation of returns. (Do
not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places.)
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Probability of
State of Economy
Security
Return
if State Occurs
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.35
−9.00
%
Normal
.30
14.00
Boom
.35
23.00
Standard Deviation: ?%
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