Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
D4
Transcribed Image Text:Calculate the Variance of the Rate of Return, Var(R) ?
Prob of
State of the Selling Price Price of the from your
Economy
End-of-Year Beginning Cash Return Percentage
Rate of
Investment Return
Weighted Difference
Weighted
average of
realized rate of the squared
difference
average of between the
rate of
of the Stock Stock
return - the
expected rate of
return
return
A
F= E/D
H=G- E(R)
D
E =C-D
G =Bx F
H^2 x B
Recession
0.35
7000
10000
Moderate
Growth
0.5
12000
10000
Strong
Growth
0.15
16000
10000
E(R) =
Var (R) =
%3D
Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.
a
0.07248
b
0.00386
0.26921
0.00939
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