Question

Consider the following information: |

Rate of Return if State Occurs | |||

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

Recession | 0.10 | 0.06 | -0.18 |

Normal | 0.60 | 0.08 | 0.16 |

Boom | 0.30 | 0.16 | 0.35 |

Required: |

Given that the expected return for Stock A is 10.200%, calculate
the standard deviation for Stock A. |

Answer #1

Ans 6.15

the standard deviation for Stock A is 6.15

Stock | Probability (P) | RETURN (Y) | (P * Y ) | P * (Y -Average Return of Y)^2 |

Recession | 10% | -6 | -0.60 | 22.50 |

Normal | 60% | 8 | 4.80 | 0.60 |

Boom | 30% | 16 | 4.80 | 14.70 |

TOTAL | 9.00 | 37.80 | ||

Expected Return = | (P * Y) | |||

9.00% | ||||

VARIANCE = | P * (Y -Average Return of Y)^2 | |||

37.8000 | ||||

Standard Deviation = | Square root of (P * (Y -Average Return of Y)^2) | |||

Square root of 37.80 | ||||

6.15 |

Consider the following information: Rate of Return if State
Occurs State of Economy Probability of State of Economy Stock A
Stock B Recession 0.20 0.02 -0.17 Normal 0.60 0.08 0.12 Boom 0.20
0.16 0.35 Required: Given that the expected return for Stock A is
8.400%, calculate the standard deviation for Stock A. (Do not round
your intermediate calculations.)

Consider the following information:
Rate of Return if State Occurs
State of Economy
Probability of State of Economy
Stock A
Stock B
Recession
0.10
0.03
-0.21
Normal
0.60
0.08
0.15
Boom
0.30
0.13
0.32
Required:
(a)
Calculate the expected return for Stock A. (Do not round
your intermediate calculations.)
(b)
Calculate the expected return for Stock B. (Do not round
your intermediate calculations.)
(c)
Calculate the standard deviation for Stock A. (Do not
round your intermediate...

Consider the following information: Rate of Return if State
Occurs State of Economy Probability of State of Economy Stock A
Stock B Recession 0.20 0.04 -0.23 Normal 0.70 0.08 0.14 Boom 0.10
0.14 0.35 Required: (a) Calculate the expected return for Stock A.
(Do not round your intermediate calculations.) (b) Calculate the
expected return for Stock B. (Do not round your intermediate
calculations.) (c) Calculate the standard deviation for Stock A.
(Do not round your intermediate calculations.) (d) Calculate the...

Consider the following information: Rate of Return if State
Occurs State of Economy Probability of State of Economy Stock A
Stock B Recession 0.10 0.03 -0.22 Normal 0.60 0.07 0.11 Boom 0.30
0.12 0.34 Required: (a) Calculate the expected return for Stock A.
(Do not round your intermediate calculations.) (b) Calculate the
expected return for Stock B. (Do not round your intermediate
calculations.) (c) Calculate the standard deviation for Stock A.
(Do not round your intermediate calculations.) (d) Calculate the...

Consider the following information:
Rate of Return if State Occurs
State of
Economy
Probability of
State of Economy
Stock A
Stock B
Recession
0.10
0.03
-0.18
Normal
0.50
0.08
0.16
Boom
0.40
0.13
0.31
Required:
(a)
Calculate the expected return for Stock A. (Do not round
your intermediate calculations.)
(Click to
select)9.50%7.52%11.22%9.70%8.63%
(b)
Calculate the expected return for Stock B. (Do not round
your intermediate calculations.)
(Click to
select)18.60%9.67%20.53%17.67%19.34%
(c)
Calculate the standard deviation for Stock A....

Consider the following information: Rate of Return If State
Occurs State of Probability of Economy State of Economy Stock A
Stock B Recession 0.16 0.05 − 0.16 Normal 0.62 0.08 0.13 Boom 0.22
0.13 0.30 Calculate the expected return for the two stocks. (Round
your answers to 2 decimal places. (e.g., 32.16)) Expected return
Stock A % Stock B % Calculate the standard deviation for the two
stocks.
I know that Expected Return for Stock A is 8.62% , Expected...

Consider the following information:
Rate of Return if State Occurs
State of Economy
Probability of State of Economy
Stock A
Stock B
Recession
0.20
0.05
-0.22
Normal
0.50
0.09
0.16
Boom
0.30
0.15
0.33
(c)
Calculate the standard deviation for Stock A. (Do not
round your intermediate calculations.)
A) 3.61%
B) 2.55%
C) 3.79%
D) 3.43%
E) 3.75%
(d)
Calculate the standard deviation for Stock B. (Do not
round your intermediate calculations.)
A) 19.22%
B) 13.59%
C) 21.18%...

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
0.35
0.18
0.29
0.31
Good
0.15
0.17
0.10
0.11
Poor
0.40
0.03
–0.07
–0.08
Bust
0.10
–0.23
–0.22
–0.13
a. Your portfolio is invested 35 percent each
in A and C and 30 percent in B. What is the expected return of the
portfolio? (Do not round intermediate calculations. Enter
your answer as a percent...

Consider the following information:
Rate of Return
if State Occurs
State of Economy
Probability of State of Economy
Stock A
Stock B
Recession
0.25
0.05
–0.11
Normal
0.55
0.12
0.16
Boom
0.20
0.16
0.36
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.)
b. Calculate the standard deviation for the two
stocks. (Do not round your intermediate calculations. Enter
your answers as a percent...

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
0.25
0.23
0.39
0.26
Good
0.15
0.12
0.15
0.16
Poor
0.30
–0.02
–0.12
–0.03
Bust
0.30
–0.18
–0.18
–0.11
a. Your portfolio is invested 35 percent each
in A and C and 30 percent in B. What is the expected return of the
portfolio? (Do not round intermediate calculations. Enter
your answer as a percent...

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