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 | –.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. |

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
–.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.

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
.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
.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
.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
.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...

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...

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. (Do not round your
intermediate calculations.)

Consider the following information:
Rate of Return If State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Recession
.20
.08
−
.15
Normal
.50
.11
.14
Boom
.30
.16
.31
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...

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