Question

The potential return on the B Corp. stock has the following distribution:

**Prob.**
**Return**

.05 -30%

.15 0%

.45 5%

.15 12%

.10 30%

.05 100%

Calculate the expected return and the standard deviation for the B Corp.

Answer #1

Problem 6-05 Expected Return: Discrete Distribution A stock's
return has the following distribution: Demand for the Company's
Products Probability of This Demand Occurring Rate of Return if
This Demand Occurs (%) Weak 0.1 -30% Below average 0.2 -8 Average
0.4 15 Above average 0.2 35 Strong 0.1 75 1.0 Calculate the stock's
expected return. Round your answer to two decimal places. %
Calculate the standard deviation. Round your answer to two decimal
places. %

What is the expected
return, variance, and the standard deviation for the stock?
Prob
Return of A
21%
6%
28%
-29%
15%
-15%
5%
12%
31%
11%
A.
5.5% 2.15%, and
15.2%
B.
5.1% , 2.95%, and
15.40%
C.
4.10% 3.95%, and
16.80%
D. -5.10%, 2.95%, and 17.19%

For the class "Time Series Modeling"
Stock B: 6% return with prob. 0.7; -8% return with prob. 0.3:
Mean=1.8%, std=6.42 3
Stock C: 45.42% return with prob. 0.7; -100% return with prob.
0.3: Mean=1.8%, std=66.64
- Calculate the mean values and the standard deviations of the
Stock return-Stock B & Stock C.
Consider a large bank that wants to estimate the average amount
owed by delinquent debtors µ. A random sample of size 100 is
selected and found the sample...

Suppose stock A has an expected return of 12% and stock B has an
expected return of 17%. Stock A has a standard deviation of 5% and
stock abs has a standard deviation of 10%. The correlation
coefficient is -1. If it is possible to lend and borrow at the risk
free rate. What will that rate be

Stock A has an expected return of 7% and Stock B has an expected
return of 11%. Stock A has a standard deviation of 5% while stock B
has a standard deviation of 15%. The correlation coefficient
between the returns on A and B is 0.28. What are the expected
return and standard deviation of a portfolio that has 40% of funds
in stock A and 60% in stock B?

FIN220 – Practice Questions (Module
3)
A stock’s expected return has the following distribution:
DEMAND FOR THE
COMPANY’S PRODUCTS
PROBABILITY OF
THIS
DEMAND OCCURRING
RATE OF RETURN IF
THIS DEMAND OCCURS
(%)
Weak
0.1
(50)
Below Average
0.2
(5)
Average
0.4
16
Above Average
0.2
25
Strong
0.1
60
Calculate the stock’s
expected return and standard deviation.
Selena Maranjian invests the following sum of money in common
stock having expected returns as follows:
Common Stock
Amount Invested in
$...

An analyst has developed the following probability distribution
for the rate of return for a common stock.
Scenario
Probability
Rate of Return
1
0.30
-5%
2
0.45
0%
3
0.25
10%
For these questions use the percentage values for your
calculations (for example 10% not 0.10). Enter your response as a
percentage rounded to 2 decimal places.
a. Calculate the expected rate of return.
Expected Rate of Return = %
b. Calculate the variance of the return.
Variance = %2
c. Calculate...

Use the following probability distribution and returns to answer
the next question What is the expected return, variance, and the
standard deviation for the stock? Prob Return of A 21% 6% 28% -29%
15% -15% 5% 12% 31% 11%

You have a three-stock portfolio. Stock A has an expected return
of 11 percent and a standard deviation of 41 percent, Stock B has
an expected return of 15 percent and a standard deviation of 59
percent, and Stock C has an expected return of 13 percent and a
standard deviation of 41 percent. The correlation between Stocks A
and B is .30, between Stocks A and C is .20, and between Stocks B
and C is .05. Your portfolio...

Stock A has a standard deviation of 22% and an expected return
of 12%. Stock B has a standard deviation of 25% and an expected
return of 10%. Jami's fund is a simple investment product that
consists of 40% Stock A and 60% Stock B. Calculate the expected
return of Jami's fund. Choose the best answer.
a.
13.2%
b.
8.6%
c.
11.2%
d.
11.6%
e.
10.8%
f.
More information is needed.

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