Question

1.

Over a particular period, an asset had an average return of 6.9 percent and a standard deviation of 9.9 percent. |

What range of returns would you expect to see 95 percent of the
time for this asset? |

Question 1: Expected range of returns___?____% to ___?____%

2.

What about 99 percent of the time? **(A negative answer
should be indicated by a minus sign. Input your answers from lowest
to highest to receive credit for your answers. Do not round
intermediate calculations and enter your answers as a percent
rounded to 2 decimal places, e.g., 32.16.)**

Question 2: Expected range of returns____?____% to ____?____%

Answer #1

**SEE THE IMAGE. ANY DOUBTS,
FEEL FREE TO ASK. THUMBS UP PLEASE**

Suppose the returns on an asset are normally distributed. The
historical average annual return for the asset was 5.9 percent and
the standard deviation was 10.5 percent. a. What range of returns
would you expect to see 95 percent of the time? (A negative answer
should be indicated by a minus sign. Enter your answers for the
range from lowest to highest. Do not round intermediate
calculations and enter your answers as a percent rounded to 2
decimal places, e.g.,...

Consider the following table for the total annual returns for a
given period of time. Series Average return Standard Deviation
Large-company stocks 11.7 % 20.6 % Small-company stocks 16.4 33.0
Long-term corporate bonds 5.1 8.4 Long-term government bonds 6.1
9.4 Intermediate-term government bonds 5.6 5.7 U.S. Treasury bills
3.8 3.1 Inflation 3.1 4.2 What range of returns would you expect to
see 95 percent of the time for long-term corporate bonds? (A
negative answer should be indicated by a minus...

Consider the following
table for the total annual returns for a given period of
time.
Series
Average return
Standard Deviation
Large-company
stocks
10.8
%
21.1
%
Small-company
stocks
16.4
33.0
Long-term corporate
bonds
6.2
8.4
Long-term government
bonds
6.1
9.4
Intermediate-term
government bonds
5.6
5.7
U.S. Treasury
bills
3.8
3.1
Inflation
3.1
4.2
Requirement
1:
What range of returns would you expect to see 95 percent of the
time for large-company stocks? (Negative amount should be
indicated by a minus...

Problem 10-18 Return Distributions [LO 3]
Consider the following table for different assets for 1926
through 2011.
Series
Average return
Standard Deviation
Large-company stocks
11.8
%
20.3
%
Small-company stocks
16.5
32.5
Long-term corporate bonds
6.4
8.4
Long-term government bonds
6.1
9.8
Intermediate-term government bonds
5.5
5.7
U.S. Treasury bills
3.6
3.1
Inflation
3.1
4.2
Requirement 1:
What range of returns would you expect to see 68 percent of the
time for large-company stocks? (Negative amount should be
indicated by...

Howell Petroleum, Inc., is trying to evaluate a generation
project with the following cash flows:
Year
Cash Flow
0
–$38,000,000
1
56,000,000
2
–9,000,000
a.
If the company requires a 10 percent return on its investments,
what is the NPV of the project? (Do not
round intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.)
b.
Compute the IRRs for this project. (A negative answer
should be indicated by a minus sign. Enter your...

Suppose the average return on Asset A is 6.5 percent and the
standard deviation is 8.5 percent, and the average return and
standard deviation on Asset B are 3.7 percent and 3 percent,
respectively. Further assume that the returns are normally
distributed. Use the NORMDIST function in Excel® to answer the
following questions.
a.
What is the probability that in any given year, the return on
Asset A will be greater than 10 percent? Less than 0 percent?
(Do not...

Suppose the average return on Asset A is 6.8 percent and the
standard deviation is 8 percent, and the average return and
standard deviation on Asset B are 3.9 percent and 3.3 percent,
respectively. Further assume that the returns are normally
distributed. Use the NORMDIST function in Excel® to answer the
following questions.
a. What is the probability that in any given year, the return on
Asset A will be greater than 10 percent? Less than 0 percent? (Do
not...

You are given the following information:
State of
Economy
Return on
Stock A
Return on
Stock B
Bear
.111
-.054
Normal
.106
.157
Bull
.082
.242
Assume each state of the economy is equally likely to
happen.
Calculate the expected return of each of the following stocks.
(Do not round intermediate calculations and enter your
answers as a percent rounded to 2 decimal places, e.g.,
32.16.)
Expected return
Stock A
%
Stock B...

You are given the following information:
State of
Economy
Return on
Stock A
Return on
Stock B
Bear
.119
-.062
Normal
.098
.165
Bull
.090
.250
Assume each state of the economy is equally likely to happen.
Calculate the expected return of 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 of each stock. (Do not...

You are given the following information:
State of
Economy
Return on
Stock A
Return on
Stock B
Bear
.109
−
.052
Normal
.108
.155
Bull
.080
.240
Assume each state of the economy is equally likely to happen.
Calculate the expected return of 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
9.90 Correct %
Stock B
14.90 Incorrect %
Calculate the standard deviation...

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