4t ofAn investment earned the following returns for the years 2013 through 2016:20 %, -5%, 30%, and 10%. What is the variance of returns for thisinvestment?Select one:Oa. 0.2987uestionO b. 0.0892c. 0.0723d. 0.1292e. 0.0292

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Answered: 4 t of An investment earned the…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 2PROB

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1. Over the past 3 years an investment returned 0.18, -0.11, and 0.08. What is the variance of returns?
Calculate the arithmetic average for the following returns: Year Return O 2.4 % O 2.2% O 3.1% O 3.4% Calculate the geometric average for the following returns: Year Return O 2.2% O 2.4% O 3.1% O 3.4% Calculate the standard deviation for the following returns: Year Return O 8.4% O 8.1% O 7.6% O 7.3% 2017 12.03% 2017 12.03% 2017 12.03% 2018 -8.24% 2018 -8.24% 2018 -8.24% 2019 1.34% 2019 1.34% 2019 1.34% 2020 4.55% 2020 4.55% 2020 4.55%
For investment A, the probability of the return being 20.0% is 0.5, 10.0% is 0.4, and -10.0% is 0.1 Compute the standard deviation for the investment with the given information. (Round your answer to one decimal place.) a. 85.00% b. 15.00% c. 34.00% d. 17.00% e. 9.00%
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uppose the average return on Asset A is 7.1 percent and the standard deviation is 8.3 percent, and the average return and standard deviation on Asset B are 4.2 percent and 3.6 percent, respectively. Further assume that the returns are normally distributed. Use the NORMDIST function in Excel® to answer the following questions. a. What is the probability that in any given year, the return on Asset A will be greater than 12 percent? Less than 0 percent? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the probability that in any given year, the return on Asset B will be greater than 12 percent? Less than 0 percent? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. In a particular year, the return on Asset A was −4.38 percent. How likely is it that such a low return will recur at some point in the future? (Do not round…
C). Your investment in A Limited earned the following returns for the years 1996 to 1999: 30%, 40%, 15% and 7%. What is the variance of returns for this investment? Round your answer to 4 decimal points.
The standard deviation of return on investment a is 0.10, while the standard deviation of return on investment b is 0.04. If the correlation coefficient between the returns on A and B is_____________. A. -0.0447 B. -0.0020 C. 0.0020 D. 0.0447
Consider the information below, compute the expected return, variance, and standard deviation. Show the solution. Probability Return of Assets 25% .30 25% .050 25% .100 25% .280
Given the following information, compute the standard deviation for Investment A: Payoff Probability 30% 0.6 15% 0.3 -12% 0.1 Group of answer choices a. None of these are correct b. 6% c. 9% d. 13%
The returns on AA Berhad and BB Berhad are given below, State of Economy Probability of Return (%) AA Return (%) BB occurring Berhad Berhad 1 0.30 6 -15 0.50 10 18 3 0.20 17 40 Calculate: a) Expected return E(R) for i) АА Beфad ii) ВВ Behad b) Standard deviation for i) AA Berhad ii) ВВ ВBehad c) Discuss any FOUR (4) benefits of diversification by referring to AA and BB Berhad.
F1
The series of returns of a single investment are presented as follows; Beginning value 100 115.0 138.0 Year 1 2 3 End value 115.0 138.0 110.4 i. compute the Arithmetic mean of the investment. ii. calculate the Geometric mean of the investment. iii. With an appropriate illustration argue which one of the two measures issupe

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4 t of An investment earned the following returns for the years 2013 through 2016:20 %, -5%, 30%, and 10%. What is the variance of returns for this investment? Select one: Oa. 0.2987 uestion O b. 0.0892 c. 0.0723 d. 0.1292 e. 0.0292