Question

**Question 1** (1 point)

a.

Calculate the expected return on stock of Gamma Inc.:

State of the economy | Probability of the states | Percentage returns |
---|---|---|

Economic recession | 15% | -5.2% |

Steady economic growth | 30% | 2.7% |

Boom | Please calculate it | 13.3% |

*Round the answers to two decimal places in percentage
form.*

b.

Calculate the expected standard deviation on stock:

State of the economy | Probability of the states | Percentage returns | |
---|---|---|---|

Economic recession | 26% | -10% | |

Steady economic growth | 28% | 10% | |

Boom | Please calculate it | 12% |

*Round the answers to two decimal places in percentage
form.*

Answer #1

Question 1
a.
Calculate the expected return on stock of Gamma Inc.:
State of the economy
Probability of the states
Percentage returns
Economic recession
28%
-7.4%
Steady economic growth
35%
2.2%
Boom
Please calculate it
14.6%
Round the answers to two decimal places in percentage
form.
b.
Calculate the expected standard deviation on stock:
State of the economy
Probability of the states
Percentage returns
Economic recession
18%
2%
Steady economic growth
22%
8%
Boom
Please calculate it
14%

Calculate the expected return on stock Gamma Inc.:
State of the economy Probability of the States percentage
returns
Economic recession 14% -5.2%
Steady economic growth 44% 2.2%
Boom please calculate it 10.5%
Round answer to two decimal places in percentage form

Calculate the expected return on stock of Gamma Inc.:
State of the economy
Probability of the states
Percentage returns
Economic recession
18%
-5.0%
Steady economic growth
49%
5.3%
Boom
Please calculate it
9.7%

Question 2 (1 point)
Calculate the expected standard deviation on stock:
State of the economy
Probability of the states
Percentage returns
Economic recession
21%
2%
Steady economic growth
30%
9%
Boom
Please calculate it
11%
Round the answers to two decimal places in percentage
form

Calculate the expected standard deviation on stock:
State of the economy Probability of the states Percentage
returns
Economic recession 23% -5%
Steady economic growth 25% 10%
Boom Please calculate it 14%

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
State of Economy
Security Return
If State Occurs
Recession
.40
–5.50
%
Normal
.40
11.00
Boom
.20
17.00
B.
Use the following information on states of the economy and stock
returns...

Variance and standard deviation (expected). Hull Consultants,
a famous think tank in the Midwest, has provided probability
estimates for the four potential economic states for the coming
year. The probability of a boom economy is 14%, the probability of
a stable growth economy is 17%, the probability of a stagnant
economy is 49%, and the probability of a recession is 20%.
Calculate the variance and the standard deviation stock?
Forecasted Returns for Each Economy
Boom
Stable
Growth
Stagnant
Recession
Stock...

An analyst has predicted the following returns for Stock A and
Stock B in three possible states of the economy.
State
Probability
A
B
Boom
0.23
0.22
0.22
Normal
0.40
0.19
0.16
Recession
?
0.17
0.10
a. What is the probability of a recession?
(Round your answer to 2 decimal places.)
b. Calculate the expected return for Stock A
and Stock B. (Round your answers to 2 decimal
places.)
c. Calculate the expected return for a
portfolio that is invested...

An analyst has predicted the following returns for Stock A and
Stock B in three possible states of the economy.
State
Probability
A
B
Boom
0.20
0.24
0.24
Normal
0.44
0.18
0.17
Recession
?
0.12
0.14
a. What is the probability of a recession?
(Round your answer to 2 decimal places.)
b. Calculate the expected return for Stock A
and Stock B. (Round your answers to 2 decimal
places.)
c. Calculate the expected return for a
portfolio that is invested...

An analyst has predicted the following returns for Stock A and
Stock B in three possible states of the economy.
State
Probability
A
B
Boom
0.21
0.24
0.30
Normal
0.53
0.21
0.23
Recession
?
0.15
0.19
What is the probability of a recession? (Round your
answer to 2 decimal places.)
. Calculate the expected return for Stock A and
Stock B. (Round your answers to 2 decimal
places.)
c. Calculate the expected return for a
portfolio that is invested 49%...

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