7. QUESTION 14What is the standard deviation of the returns on a portfolio that is invested 20 percent in stock A and 80 percent in stock B given the information in the table below?Returns if State OccursStock BState of the EconomyProbability of State of the Economy Stock ANormal90%RecessionOA00198O8.00252OC.003740.00468OE. 0060610%10%-3%7%2%

Calculated of Expected (mean) return of a stock - E(R)=∑i=1n(Pi×Ri) Where,…

14 What is the standard deviation of the returns on a portfolie that is invested 20 percent in slock A and 80 percent in stock 8 given the information in t Returns if State Occurs State of the Economy Probability of State of the Economy Stock A Stock B Normal Recession OA00198 0800252 OC.00374 O 0.004668 OE00606 90% 10% 10% 3% 7% 2%

14 What is the standard deviation of the returns on a portfolie that is invested 20 percent in slock A and 80 percent in stock 8 given the information in t Returns if State Occurs State of the Economy Probability of State of the Economy Stock A Stock B Normal Recession OA00198 0800252 OC.00374 O 0.004668 OE00606 90% 10% 10% 3% 7% 2%

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 2E

See similar textbooks

Similar questions

Consider the following information for the financial asset H. State of the World Probability of Rates of Return (%) Occurrence Asset H Asset J Recession 0.15 -4.00 12.00 Normal 0.55 8.00 6.00 Expansion 0.30 12.00 2.00 The expected return for asset H is a. 7.80% b. 6.60% c. 7.4% d. 8.6%
Please show the steps on how to solve in excel and please show the formulas Investments in storage facilities in San Diego, CA has a 62% return correlation with investments in multi-family properties in Atlanta. using the information provided below please solve a and b. Expected return - San Diego Storage 8.0%Expected return - Multi-Family Atlanta 7.0%SD of expected return - San Diego Storage 12.5%SD of expected return - Multi-Family Atlanta 15.0% a. What is the expected return on a portfolio that invests 40% in San Diego storage facilities and 60% in Atlanta multi-family properties? b. What can be said about the annual standard deviation of return of a portfolio that invests 40% in San Diego storage facilities and 60% in Atlanta multi-family properties? (note: the answer should only indicate a value that is smaller or larger than a specific percentage)
Assume you can invest in 2 projects whose payoff depend on the state of the economy. The profits from each project for each state of the economy are presented below. What are the expected payoffs of each project if there is a 50% chance of a recession and a 50% of no recession? Profit under recession Profit under normal conditions Project 1100,000 150,000 Project 2 50,000 240,000 O Project 1: $120,000 and Project 2: $150,000 Project 1: $125,000 and Project 2: $115,000 Project 1: $145,000 and Project 2: $145,000 O Project 1: $125,000 and Project 2: $145,000
5...
Market risk is associated with the fact some investment returns may fluctuate due to periods of economic expansion followed by periods of recession. True or FalseFalseTrue
"A financial investor has $31,000 to invest. The choices have been narrowed down to the following two options.-OPTION 1:Invest in a foreign bond that will mature in one year. This will entail an immediate brokerage fee of $100. For simplicity, assume that the bond will provide interest of $2,470, $2,130, or $1,527 over the one-year period and that the probabilities of these occurrences are assessed to be 0.29, 0.43, and 0.28, respectively.-OPTION 2:Invest in a $31,000 certificate with a savings-and-loan association. Assume that this certificate has an effective annual rate of 5.6%.Which form of the investment should the investor choose in order to maximize her expected financial gains? Enter the expected net gain (total return - initial investment - fee) of the preferred option."
Question 47 Other things being constant, when a business issues more stock, the A) supply of the stock is greater and thus the price will fall. supply of the stock is less and thus the price will rise. demand for the stock is greater and thus the price will rise. demand for the stock is less and thus the price will fall. Question 48 P Type here to search esc 12 米 IOI 40 & 3 4. 7. (O 立 %24 %23
A share of stock of A-Star Inc. is now selling for $23.50. A financial analyst summarizes the uncertainty about the rate of return on the stock by specifying three possible scenarios: Business Condition Scenario, s Probability, p(s) End of Year Price Annual Dividend High growth 1 0.35 $35 $ 4.40 Normal growth 2 0.30 27 4.00 No growth 3 0.35 15 4.00 What are the holding-period returns for a one-year investment in the stock of A-Star Inc. for each of the three scenarios? Calculate the expected HPR and standard deviation of the HPR.
14. Suppose an investment project has an NPV of $75 million if it becomes successful and an NPV of –$25 million if it is a failure. What is the minimum probability of success above which you should make the investment? Group of answer choicesa. 0.50b. 0.25c. 0.33d. 0.10
Pls solve it quickly.
You've estimated the following expected returns for a stock, depending on the strength of the economy: State (s) Probability Expected return Recession 0.3 -0.03 Normal 0.5 0.08 Expansion 0.2 0.13 What is the expected return for the stock? What is the standard deviation of returns for the stock?
Typed plz And Asap Thanks