Homework Answers
expected return will be equal to sum of probabilties
expected return on stock A is 18.55%
expected return on stock B is 13.65%
standard deviation of A is 4.36%
standard deviation of B is 2.41%
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9. Award: 7.69 points Problem 13-7 Calculating Returns and Standard Deviations (L01) Consider the following information:...
5. Award: 7.69 points Problem 12-9 Calculating Returns and Variability (L01) You've observed the following returns...
5. Award: 7.69 points Problem 12-9 Calculating Returns and Variability (L01) You've observed the following returns on Regina Computer's stock over the past five years: 12%, -9%, 20%, 17%, and 10%. a. What was the arithmetic average return on Regina's stock over this five-year period? (Round the final answer to 1 decimal place.) Average return % b-1. What was the variance of Regina's returns over this period? (Do not round intermediate calculations. Round the final answer to 5 decimal places.)...
Problem 13-7 Calculating Returns and Standard Deviations (LO1] Consider the following information: Rate of Return If...
Problem 13-7 Calculating Returns and Standard Deviations (LO1] Consider the following information: Rate of Return If State Occurs State of Probability of - State of Stock A Stock B Recession 15 - .10 Normal 56 .09 Boom Economy Economy .06 29 14 30 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...
Problem 13-10 Returns and Standard Deviations (L01) Consider the following information: Rate of Return If State...
Problem 13-10 Returns and Standard Deviations (L01) Consider the following information: Rate of Return If State Occurs Probability of - State of Economy .15 Stock A Stock B Stock C State of Economy Boom Good Poor Bust 1:50 .43 .34 .08 .50 .14 30 -09 .05 ces a. Your portfolio is invested 32 percent each in A and C, and 36 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your...
Problem 11-7 Calculating Returns and Standard Deviations [LO 1] Consider the following information: Rate of Return...
Problem 11-7 Calculating Returns and Standard Deviations [LO 1] Consider the following information: Rate of Return if State Occurs Probability of State – of Economy Stock B State of Economy Recession Normal Boom Stock A 045 .125 310 -16 Requirement 1: Calculate the expected return for the two stocks. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Expected return E(RA) E(R) Requirement 2: Calculate the standard deviation for the two...
6. Award: 7.69 points Problem 12-10 Calculating Real Returns and Risk Premiums (L01) You've observed the...
6. Award: 7.69 points Problem 12-10 Calculating Real Returns and Risk Premiums (L01) You've observed the following nominal returns on Regina Computer's stock over the pas five years: 18%, -14%, 20%, 22%, and 10%. suppose the average inflation rate over thi period was 3.1% and the average T-bill rate over the period was 4.4%. a. What was the average real return on Regina's stock? (Do not round intermediate calculations Round the final answer to 2 decimal places.) Average real return...
Problem 13-9 Returns and Variances (L01, 2) Consider the following information: State of Economy Boom Bust...
Problem 13-9 Returns and Variances (L01, 2) Consider the following information: State of Economy Boom Bust Probability of State of Economy 0.58 0.42 Rate of Return if State Occurs Stock A Stock B Stock C 0.07 0.15 0.33 0.15 0.05 -0.07 a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Expected return % b. What is the variance of a portfolio...
Problem 13-10 Returns and Standard Deviations [LO1] Consider the following information: Rate of Return If...
Problem 13-10 Returns and Standard Deviations [LO1] Consider the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .15 .36 .46 .26 Good .45 .21 .17 .10 Poor .35 −.03 −.06 −.04 Bust .05 −.17 −.21 −.07 a. Your portfolio is invested 22 percent each in A and C, and 56 percent in B. What is the expected return of the portfolio? (Do not...
S URNA. CI. 5. Calculating Returns and Standard Deviations Based on the following information calculate the...
S URNA. CI. 5. Calculating Returns and Standard Deviations Based on the following information calculate the expected return and standard deviation for the two stocks: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Recession Normal Boom 55 -.20 .13 .33
Problem 13-10 Returns and Standard Deviations (LO1) Consider the following information: Rate of Return if State...
Problem 13-10 Returns and Standard Deviations (LO1) Consider the following information: Rate of Return if State Occurs State of Probability of State of Economy Economy Stock A Stock B Stock C 34 .08 33 .15 .50 .43 .14 Boom Good Poor Bust -03 05 29 -10 a. Your portfolio is invested 32 percent each in A and C, and 36 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer...
4. 7. Calculating Returns and Standard Deviations. Based on the following information, calculate the expected return...
4. 7. Calculating Returns and Standard Deviations. Based on the following information, calculate the expected return and standard deviation for the two stocks. Probability of State of Economy State of Economy Recession Normal Boom Rate of Return if State Occurs Stock A .02 Rate of Return if State Occurs Stock B -30 .18 .10 .50 .10 40 .15
5. Award: 7.69 points Problem 12-9 Calculating Returns and Variability (L01) You've observed the following returns on Regina Computer's stock over the past five years: 12%, -9%, 20%, 17%, and 10%. a. What was the arithmetic average return on Regina's stock over this five-year period? (Round the final answer to 1 decimal place.) Average return % b-1. What was the variance of Regina's returns over this period? (Do not round intermediate calculations. Round the final answer to 5 decimal places.)...
Problem 13-7 Calculating Returns and Standard Deviations (LO1] Consider the following information: Rate of Return If State Occurs State of Probability of - State of Stock A Stock B Recession 15 - .10 Normal 56 .09 Boom Economy Economy .06 29 14 30 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...
Problem 13-10 Returns and Standard Deviations (L01) Consider the following information: Rate of Return If State Occurs Probability of - State of Economy .15 Stock A Stock B Stock C State of Economy Boom Good Poor Bust 1:50 .43 .34 .08 .50 .14 30 -09 .05 ces a. Your portfolio is invested 32 percent each in A and C, and 36 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your...
Problem 11-7 Calculating Returns and Standard Deviations [LO 1] Consider the following information: Rate of Return if State Occurs Probability of State – of Economy Stock B State of Economy Recession Normal Boom Stock A 045 .125 310 -16 Requirement 1: Calculate the expected return for the two stocks. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Expected return E(RA) E(R) Requirement 2: Calculate the standard deviation for the two...
6. Award: 7.69 points Problem 12-10 Calculating Real Returns and Risk Premiums (L01) You've observed the following nominal returns on Regina Computer's stock over the pas five years: 18%, -14%, 20%, 22%, and 10%. suppose the average inflation rate over thi period was 3.1% and the average T-bill rate over the period was 4.4%. a. What was the average real return on Regina's stock? (Do not round intermediate calculations Round the final answer to 2 decimal places.) Average real return...
Problem 13-9 Returns and Variances (L01, 2) Consider the following information: State of Economy Boom Bust Probability of State of Economy 0.58 0.42 Rate of Return if State Occurs Stock A Stock B Stock C 0.07 0.15 0.33 0.15 0.05 -0.07 a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Expected return % b. What is the variance of a portfolio...
S URNA. CI. 5. Calculating Returns and Standard Deviations Based on the following information calculate the expected return and standard deviation for the two stocks: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Recession Normal Boom 55 -.20 .13 .33
Problem 13-10 Returns and Standard Deviations (LO1) Consider the following information: Rate of Return if State Occurs State of Probability of State of Economy Economy Stock A Stock B Stock C 34 .08 33 .15 .50 .43 .14 Boom Good Poor Bust -03 05 29 -10 a. Your portfolio is invested 32 percent each in A and C, and 36 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer...
4. 7. Calculating Returns and Standard Deviations. Based on the following information, calculate the expected return and standard deviation for the two stocks. Probability of State of Economy State of Economy Recession Normal Boom Rate of Return if State Occurs Stock A .02 Rate of Return if State Occurs Stock B -30 .18 .10 .50 .10 40 .15
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