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 | .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. |

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
.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 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
.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...

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.

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 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
Probability
of
Economy
State of
Economy
Stock A
Stock B
Recession
.25
.04
–.17
Normal
.30
.10
.17
Boom
.45
.15
.37
a.
Calculate the expected return for the two stocks. (Do
not round intermediate calculations. Enter your answers as a
percent rounded to 2 decimal places. Omit the "%" sign in your
response.)
Expected return for
A
%
Expected return for
B
%
b.
Calculate...

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
.30
.20
.36
.27
Good
.35
.17
.24
.09
Poor
.20
−.01
−.09
−.04
Bust
.15
−.09
−.20
−.10
a. Your portfolio is invested 30 percent each
in Stocks A and C and 40 percent in Stock B. What is the expected
return of the portfolio? (Do not round intermediate
calculations. Enter your answer as...

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...

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...

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