A stock’s returns have the following distribution:   Calculate the stock’s expected return, standard deviation, and the coefficient of variation.

Q: The wider the dispersion of returns on a stock, the:

A: Investors evaluate the portfolio or security on the basis of risk profile. The risk profile can be…

Q: What is the relationship of a portfolio standard deviation to the weighted average standard…

A: The standard deviation measures volatility of an investment or the risk of an investment. The…

Q: Briefly explain what the Beta of a stock means. What values can it take and what do these imply?…

A: Beta is a measure of a stock's volatility in relation to the overall market. If a stock moves less…

Q: 5. The Sharp ratio of a portfolio is defined as A. the ratio between the return of the portfolio and…

A: Sharpe Ratio: It is a ratio that is named after William Sharpe an American economist & is…

Q: Suppose you have mean-variance utility function with a coefficient of risk Aversion-0, which stocks…

A: The risk aversion measures the risk preference. In this case, the investor is risk neutral as his…

Q: The standard deviation of the returns of a portfolio is the geometric average of the standard…

A: Portfolio standard deviation measures the fluctuations in a portfolio how volatile a portfolio is…

Q: Define the terms covariance and correlationcoefficient. How are they related to one another,and how…

A: Covariance refers to the situation which tells about the association between two variables how they…

Q: Based on the following information, what is the diversifiable proportion for the stock? Standard…

A: Stock's standard deviation: 0.5Standard deviation of the index: 0.1Correlation: 0.6

Q: Define average stock’s beta

A: Beta tells about the change in stock’s return given to change in market risk.

Q: What are the two components of most stocks’ expected total return?

A: Expected total return refers to the full return of an investment over a certain period of time.

Q: a. Calculate the expected return for a share in S.  b. Calculate the standard deviation of a share…

A: (a) Calculating the expected return for a share in S:

Q: How do you calculate the Treynor ratio for the AMD stock?

A: Treynor ratio is referred to as the portfolio performance, which used to measure regarding the…

Q: Year Stock A Stock B 2010 - 6% 25% 2011 17% 5% 2012 6% 4% 2013 - 9% - 2% 2014 4% - 4% 2015 13% 25%

A: A stock is a security that describes the percentage of ownership of a particular company held by an…

Q: f a stock's variance of return is written as σ2, then its standard deviation will be written as:

A: Standard deviation and variance are the measures of risk and volatility and both are important…

Q: What does the meaning of maximum and minimum price in the stock performance graph? how to know which…

A: Succinctly summarized, a stock chart is a graph that illustrates the price of a stock over a certain…

Q: Beta is measure of a stock's _____________________ risk. Select all that apply. A) systematic…

A: There are two types of risk are present: 1. Systematic risk 2. Unsystematic risk.

Q: Consider the following two regression lines for Stock A (left) and B (right) in the following…

A: Security market line:The security market line (SML) of stocks is a vital concept in finance that…

Q: What is the correlation between returns of stock S and T, given that covariance between stocks is…

A: Given, Covariance = 2.419 Standard deviation =1.23 and 2.21

Q: A stock's standard deviation determines how the stock affects the riskiness of a diversified…

A: The standard deviation measures total risk and beta measures the market risk. The statement mentions…

Q: Differentiate between the terms expected rate of return, required rate of return, and historical…

A: The expected rate of return is the normal rate of return that the speculation can anticipate. By and…

Q: how do I calculate the product of the deviations so that I can get the Covariance number for the…

A: Data given: Probability Stock Fund Rate of Return A B 0.1 -34% 0.2 -20% 0.3 21% 0.4 36%…

Q: Total risk can be divided into: standard deviation and variance. standard deviation and covariance.…

A: Risk is the probability of loss. It describes the chance that there will be a negative return or…

Q: What are the the key concepts (e.g., the standard deviation of the portfolio is less than the…

A: The question is based on the explanation of key concept behind creating a portfolio with different…

Q: Explain how the following parameters are used for analyzing a stock (or portfolio). Include in your…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: what are two methods to calculate the expected rate of return for stocks?

A: The required rate of return (RRR) is the lowest rate of return an investor will accept for holding…

Q: Illustrate the calculation of the standard deviation of returns?

A: Standard deviation refers to a measure of variation or dispersion of a set of values. We can…

Q: Calculate the expected return for Stock A.

A: Expected Return: It represents the profit or loss expected by an investor on an investment. It is…

Q: How do you calculate the beta of stock?

A: Beta is the measure of stock's volatility to the overall market, and is calculated as-

Q: how do you calculate a stocks average monthly return,its return variance ,standard deviation and…

A: Variance is a measure of risk of returns, it shows how much actual return has deviated from its…

Q: What does standard deviation measure? A. The holding period B. The gain on the investment C. Risk D.…

A: We make investments in different instruments like stocks, bonds etc. These investments gives us some…

Q: What is the correlation coefficient of the returns of the stock and the returns of the market?

A: Correlation: It is a measure of statistics used to show the degree of association between two…

Q: Consider the following probability distribution for stocks A and B: Table 4 Probability Distribution…

A: The formula for calculating the variance of a stock is

Q: Define actual rate of return on stock

A: Actual rate of return on stock

Q: How is the standard deviation of returns calculated?

A: Standard deviation is ascertained as follows: The mean worth is dictated by including all the…

Q: The correlation with Market index, Beta and CAPM Req. Return worked out manually.

A: State of the Economy Probability T-Bills Philips Pay-up Rubber made Market Index Recession 0.2 7%…

Q: Which of the following techniques is used to value stock options?   a. Black-Scholes method b.…

A: black scholes method is used to value options

Q: Explain the difference between expected rate of return, required rate of return, and historical rate…

A: Return Return is also referred to as the money lost or made over a specific period of time. It can…

Q: Based on the information, calculate expected returns for each share, variance for each share and…

A: Here we are provided with 4 different possible outcomes/situations, the probability of each outcome…