4. How does risk (standard deviation) grows with the holding period in a random walk?
4. How does risk (standard deviation) grows with the holding period in a random walk?
Homework Answers
Risk is measured by Beta and beta can be determined with the help of Standard Deviation. Beta more than 1.0 is volatile and less than that is less volatile. The more volatile the stock price, the more risky in nature it is. Holding period is when you hold an asset or a portfolio over a period and expect a return on it. Now the connection in between holding period and risk volatility is that, holding a stock for a longer term could alleviate any temporary volatilities that takes place in the business or the market. Portfolios are designed in a way that average returns and standard deviations benefit the overall returns over the period to the investor. Risk may grow along withe holding period only when the stock performance is consistently proving to be a failure, not in the case of consistently performing well.
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4. How does risk (standard deviation) grows with the holding
period in a random walk?
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please show all work.
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Corporation and for the market.
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data, you will need to annualize the returns to make them
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convert from monthly to...
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Please hurry. will rate thumbs up. What kind of risk does the standard deviation of an...
Please hurry. will rate thumbs up.
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please show all work.
holding period retum? (Standard deviation) The following expectations have been made of a project. Compute the projecte expected return and standard deviation. Economic state Poor Average Good Excellent Probability of state .25 50 20 Return -10% 5% 0% 20% 1
a. Given the following holding-period returns, compute the
average returns and the standard deviations for the Zemin
Corporation and for the market.
b. If Zemin's beta is 1.98 and the risk-free rate is 7
percent, what would be an expected return for an investor owning
Zemin? (Note: Because the preceding returns are based on monthly
data, you will need to annualize the returns to make them
comparable with the risk-free rate. For simplicity, you can
convert from monthly to...
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Please hurry. will rate thumbs up.
What kind of risk does the standard deviation of an individual asset measure?
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