HomeworkLib
Question

Calculate the correlation of the two stocks below based on the scenario forecasts given: Probability Atlantis...

Calculate the correlation of the two stocks below based on the scenario forecasts given:

Probability Atlantis Co. Baltazaar Inc.
Boom 0.3            6 14%
Normal 0.6               4 4%
Bust 0.1 -10% -6%

Provide your answer in decimals, rounded to two decimals.

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

I HAVE PRESENTED IN EXCEL BUT NO EXCEL FUNCTION IS USED. IT IS A SIMPLE MATHEMATICAL CALCULATION IN TABLE FORM. VERY EASY TO REMEMBER AND PREPARE

CORRELATION =0.8

0 0
Add a comment
Know the answer?
Add Answer to:
Calculate the correlation of the two stocks below based on the scenario forecasts given: Probability Atlantis...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.3 -6 %...

    Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.3 -6 % 14 % Normal economy 0.6 15 11 Boom 0.1 24 5 Assume a portfolio with weights of 0.60 in stocks and 0.40 in bonds. a. What is the rate of return on the portfolio in each scenario? (Enter your answer as a percent rounded to 1 decimal place.) b. What are the expected rate of return and standard deviation of the portfolio? (Enter your...

  • Consider the following scenario analysis: Scenario Recession Normal economy Boom Rate of Return Probability Stocks Bonds...

    Consider the following scenario analysis: Scenario Recession Normal economy Boom Rate of Return Probability Stocks Bonds 0.20 -5% 14% 0.60 158 0.20 1 25 4 a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms? • Yes No b. Calculate the expected rate of return and standard deviation for each investment. (Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place.) Expected Rate of Return Standard...

  • Consider the following scenario analysis: Scenario Recession Normal economy Boom Rate of Return Probability Stocks Bonds...

    Consider the following scenario analysis: Rate of ReturnScenarioProbabilityStocksBondsRecession0.20-5%14% Normal economy 0.60158Boom0.20 254Assume a portfolio with weights of .60 in stocks and .40 in bonds. a. What is the rate of return on the portfolio in each scenario? (Do not round percent rounded to 1 decimal place.)                              Rate of Return Recession Normal economy Boomb. What are the expected rate of return and standard deviation of the portfolio? (Do not round intermediate calculations. Enter your answer as...

  • 5. Given below are the probability distribution of two assets-X and Y States of Economy Probability...

    5. Given below are the probability distribution of two assets-X and Y States of Economy Probability MEGA BOOM BOOM NORMAL BUST MEGA BUST 0.1 0.2 0.4 Expected returns of the 2 assets (%) - X Y 50 100 40 70 30 50 10 -20 -10 -50 0.2 0.1 Which one has higher stand-alone risk? (Compute Coefficient of Variation]

  • Consider the following scenario analysis:     Rate of Return Scenario Probability Stocks Bonds Recession 0.20...

    Consider the following scenario analysis:     Rate of Return Scenario Probability Stocks Bonds Recession 0.20 –6 % 18 % Normal economy 0.50 19   11   Boom 0.30 26   8   a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms? b. Calculate the expected rate of return and standard deviation for each investment.   Expected Rate of Return Standard Deviation Stocks ? ? Bonds ? ?

  • Rate of Return Scenario Probability Stocks Bonds Recession .20 −9 % +20 % Normal economy .50...

    Rate of Return Scenario Probability Stocks Bonds Recession .20 −9 % +20 % Normal economy .50 +21 +8 Boom .30 +31 +8 Consider a portfolio with weights of .6 in stocks and .4 in bonds. a. What is the rate of return on the portfolio in each scenario? (Do not round intermediate calculations. Round your answers to 1 decimal place.) Scenario Rate of Return Recession % Normal economy % Boom % b. What are the expected rate of return and...

  • Calculate the standard deviation for the two stocks

    Consider the following information: Probability of StateRate of Return if State OccursEconomyof EconomyStock AStock B  Recession.24              .055         –.34           Normal.64              .135         .24           Boom.12              .230         .47          a.Calculate the expected return for the two stocks. (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 the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)  

  • The probability of distribution of returns for two stocks A and B is given in the...

    The probability of distribution of returns for two stocks A and B is given in the following table. Scenario Probability return of stock A Return of Stock B Good .25 -.02 .08 Normal .35 .05 .01 Bad .4 .05 -.1 Expected return of stock A is ________ and that of stock B is __________ a. 2.16%, 0.45% b. 3.25%, 1% c. 2.16%, -1.24% d. 3.25%, -1.65%

  • • Based on the following information, calculate the expected return and standard deviation for the two...

    • Based on the following information, calculate the expected return and standard deviation for the two stocks: Rate of Return If State Occurs State of Economy Probability of State of Economy Stock A Stock B Recession 20% 6% -20% Normal 55% 7% 13% Boom 25% 11% 33%

  • Based on the economic scenarios shown below, what is the stock’s annual expected return? Scenario Probability...

    Based on the economic scenarios shown below, what is the stock’s annual expected return? Scenario Probability Return Boom 15% 35% Normal 35% 20% Recession 35% -10% Depression 15% -20% A) 5.6% B) 5.2% C) 5.4% D) 5.0% E) 5.8%

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT