Question
Consider the following returns for two investments, Investments 1 and 2, over the past four years:...
Consider the following returns for two investments, Investments 1 and 2, over the past four years:
| Investment 1: | 8% | 14% | -3% | 14% |
| Investment 2: | 13% | 12% | -10% | 14% |
a-1. Calculate the mean for each investment.
(Round your answers to 2 decimal
places.)
Mean-
a-2. Which investment provides the higher
return?
Investment 1 or Investment 2?
b-1. Calculate the standard deviation for each
investment. (Round your answers to 2
decimal places.)
Standard Deviation-
b-2. Which investment provides less risk?
Investment 1 or Investment 2?
c-1. Given a risk-free rate of 1.2%, calculate the
Sharpe ratio for each investment. (Round your answers to 2
decimal places.)
Sharpe Ratio for Investment 1-
Sharpe Ratio for Investment 2-
c-2. Which investment has performed better?
Investment 1 or Investment 2?
Homework Answers
Answer #1
a-1)
mean for investment 1 =8.25
mean for investment 2 =7.25
Investment 1
b-1)
standard deviation for investment 1 =8.02
standard deviation for investment 2 =11.53
Investment 1
c-1)
Sharpe Ratio for Investment 1 =(8.25-1.2)/8.02 =0.88
Sharpe Ratio for Investment 2 =(7.25-1.2)/11.53 =0.52
c-2. Investment 1
Not the answer you're looking for?
Similar Questions
Consider the following returns for two investments, A and B, over the past four years: Investment...
Consider the following returns for two investments, A and B,
over the past four years:
Investment 1:
6%
17%
-4%
15%
Investment 2:
3%
12%
-9%
15%
a. Calculate the mean for each investment.
(Round your answers to 2 decimal
places.)
Investment 1
%
Investment 2
%
a.1. Which investment provides the higher
return?
Investment 2
Investment 1
b. Calculate the standard deviation for each
investment. (Round your answers to 2
decimal places.)
Investment 1 SD
%
Investment...
Consider the following data for two investments, A and B: Investment A: x⎯⎯x¯ = 10 and...
Consider the following data for two investments, A and
B:
Investment A: x⎯⎯x¯ = 10 and s = 5
Investment B: x⎯⎯x¯ = 7 and s = 3
a-1. Which investment provides the higher return?
Investment B
or
Investment A
a-2. Which investment provides less risk?
Investment B
or
Investment A
b-1. Given a risk-free rate of 1.45%, calculate the Sharpe
ratio for each investment. (Round your answers to 2 decimal
places.)
Sharpe ratio for investment A______
Sharpe ratio for...
Consider the following data for two investments, A and B: Investment A: x¯x¯ = 13 and...
Consider the following data for two investments, A and B:
Investment A: x¯x¯ = 13 and s =
10
Investment B: x¯x¯ = 12 and s =
9
1. Which investment provides a higher return?
Investment A
Investment B
1.a. Which investment provides less risk?
Investment B
Investment A
2. Given a risk-free rate of 2.50%, calculate the Sharpe
ratio for each investment. (Round your answers to 2 decimal
places.)
Sharpe Ratio
Investment A
Investment B
2.a. Which investment provides...
The historical returns for two investments - A and B - are summarised in the following...
The historical returns for two investments - A and B - are
summarised in the following table for the period 2013 to 2017. Use
the data to answer the questions that follow.
Year
Rate of Return
A
B
2013
19%
8%
2014
1%
10%
2015
10%
12%
2016
26%
14%
2017
4%
16%
Calculate the average return for each investment.
Calculate the standard deviation for each investment’s returns.
Which investment is more risky?
Calculate the reward-to-variability (Sharpe) ratio for the...
The returns of Company A for the past six months are 12%, 11%, 16%, 8%, 13%,...
The returns of Company A for the past six months are 12%, 11%,
16%, 8%, 13%, and 14%. Calculate the standard deviation of this
company’s return.
In your portfolio you have invested 30% and 70% in Stock X and
Stock Z, respectively. The standard deviation of X is 12%. The
standard deviation of Z is 9%. The correlation between X and Z is
0.50. Calculate the portfolio standard deviation.
For the same problem before, now calculate the portfolio
standard deviation...
A stock's returns have the following distribution: Demand for the Company's Products Probability of This Demand...
A stock's returns have the following distribution:
Demand for the
Company's Products
Probability of This
Demand Occurring
Rate of Return If
This Demand Occurs
Weak
0.1
(26%)
Below average
0.2
(14)
Average
0.3
13
Above average
0.3
29
Strong
0.1
46
1.0
Assume the risk-free rate is 2%. Calculate the stock's expected
return, standard deviation, coefficient of variation, and Sharpe
ratio. Do not round intermediate calculations. Round your answers
to two decimal places.
Stock's expected return: %_____
Standard deviation: %______
Coefficient of...
A stock's returns have the following distribution: Demand for the Company's Products Probability of This Demand...
A stock's returns have the following distribution:
Demand for the
Company's Products
Probability of This
Demand Occurring
Rate of Return If
This Demand Occurs
Weak
0.1
(32%)
Below average
0.2
(13)
Average
0.3
14
Above average
0.3
39
Strong
0.1
53
1.0
Assume the risk-free rate is 2%. Calculate the stock's expected
return, standard deviation, coefficient of variation, and Sharpe
ratio. Do not round intermediate calculations. Round your answers
to two decimal places.
Stock's expected return: %
Standard deviation: %
Coefficient of...
A stock's returns have the following distribution: Demand for the Company's Products Probability of This Demand...
A stock's returns have 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
(14)
Average
0.3
17
Above average
0.3
26
Strong
0.1
51
1.0
Assume the risk-free rate is 2%. Calculate the stock's expected
return, standard deviation, coefficient of variation, and Sharpe
ratio. Do not round intermediate calculations. Round your answers
to two decimal places.
Stock's expected return: %
Standard deviation: %
Coefficient of...
A stock's returns have the following distribution: Demand for the Company's Products Probability of This Demand...
A stock's returns have the following distribution:
Demand for the
Company's Products
Probability of This
Demand Occurring
Rate of Return If
This Demand Occurs
Weak
0.1
(26%)
Below average
0.2
(14)
Average
0.3
18
Above average
0.3
30
Strong
0.1
53
1.0
Assume the risk-free rate is 4%. Calculate the stock's expected
return, standard deviation, coefficient of variation, and Sharpe
ratio. Do not round intermediate calculations. Round your answers
to two decimal places.
Stock's expected return: %
Standard deviation: %
Coefficient of...
A. Here are data on two companies. The T-bill rate is 6.0% and the market risk...
A.
Here are data on two companies. The T-bill rate is 6.0% and the
market risk premium is 7.7%.
Company
$1 Discount
Store
Everything
$5
Forecast return
15%
14%
Standard deviation of
returns
18%
20%
Beta
1.7
1
What would be the fair return for each company, according to the
capital asset pricing model (CAPM)? (Round your answers to
2 decimal places.)
Company
Expected Return
$1 Discount Store
%
Everything $5
%
B.
Consider the following information:
Portfolio
Expected Return...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 5 minutes ago
asked 20 minutes ago
asked 24 minutes ago
asked 31 minutes ago
asked 32 minutes ago
asked 40 minutes ago
asked 43 minutes ago
asked 44 minutes ago
asked 47 minutes ago
asked 55 minutes ago
asked 1 hour ago
asked 1 hour ago