Based on the table below, what is the expected return of the stock? Probability 0.20 0.10 0.40 0.20 0.10 O 12.8% O 12.6% O 12.4% O 13.0% Return 8% 10% 12% 15% 20%

Q: what is the return of stock a what is the return of stockb what is the standard deviation on stock…

A: Given: tate Probability(P) Return A Return B Poor 40% -0.08 -0.15 Normal 35% 0.19 0.14 Good…

Q: Assume rhat the risk-free rate is 5.5% and the market rate  premium is 6%. A) What is the required…

A: As per CAPM, Required rate of return = Risk free Rate + (beta * Market Risk premium)

Q: a) Calculate the expected rate of return, FB, for stock B3 (FA= 14,30%) b) Calculate the standard…

A: Risk and return are essential financial principles. The term “risk” refers to the uncertainty and…

Q: stock has a required return of 8%, the risk-free rate is 3.5%, and the market risk premium is 3%. a.…

A: CAPM is an abbreviation used for Capital asset pricing model. This model is used to determine the…

Q: The expected rate of return and standard deviation of the global minimum variance portfolio, G, are…

A: Risk and return are essential financial principles. The term “risk” refers to the uncertainty and…

Q: You are given the following return probability distribution for Stock X and Y: Normal market 0.5 10%…

A: Correlation function can be used in the Excel sheet for determining the relationship between the…

Q: Intro We know the following expected returns for stocks A and B, given different states of the…

A: According to bartleby guidelines,  if question involves multiple subparts,  then 1st sub 3 parts…

Q: What are the expected returns for stocks Y and Z under the conditions shown below?   A0 0.04…

A: Calculation of Expected Return for Stock Y:

Q: Suppose the CAPM holds. The risk-free rate is 2%, and the expected return of the market portfolio is…

A: As per CAPME(ri) = Rf  + Bi * (E(Rm) - Rf)E(ri) = Expected returnRf = Risk free rateBi = BetaE(Rm) =…

Q: What is the standard deviation of Stock A returns given the information below about its returns…

A: Solution:- Standard deviation means the deviation of a value around its mean. Standard deviation in…

Q: Stock A's stock has a beta of 1.20, and its required return is 12.25%.  Stock B's beta is 0.80.  If…

A: Given Information : Stock A's Beta - 1.20 Stock A's Required return - 12.25% Stock B's Beta - 0.80…

Q: robability

A: Expected return can be defined as the return which is obtained by multiplying the potential outcome…

Q: Assume that the risk-free rate is 6.5% and the market risk premium is 5%. What is the required…

A: Solution:-Capital Asset Pricing Model (CAPM) is a model which gives a formula to calculate the…

Q: Beta and required rate of return A stock has a required return of 11 percent; the risk-free rate is…

A: In the given question we require to compute the beta of stock from below details : Required return =…

Q: Suppose your expectations regarding the stock price are as follows: State of the Market Boom Normal…

A: The standard deviation quantifies the level of risk associated with a stock, while the mean…

Q: What is the standard deviation of the returns on a stock given the following information? Could you…

A: For calculating the standard deviation using the following formula. SD = ∈[ P(GR-ER)2]  Where  P =…

Q: Stock A: Beta is 1.30, the require return in 12.00% Stock B: Beta 0.80. If the risk free is 4.75%.…

A: To solve the question, first we need to determine the market return and then use it to determine the…

Q: Suppose your expectations regarding the stock price are as follows: State of the Market…

A: Market Probability 0.35, 0.3, 0.35HPR ( including Dividend )44.5%, 14%, -16.5%Applying the Formula

Q: Consider the following probability distribution for stocks A and B: State Return on Stock A 1 10% 2…

A: Correlation is a statistical measure that is used in finance to estimate the degree to which two…

Q: Assume the stock’s future prices of stock A and stock B as the following distribution State Future…

A: Here, State Future Price Stock A Future price Stock B 1 $10 $7 2 $8 $9…

Q: Suppose you observe the following situation: Probability of State State of Economy Recession Normal…

A: Here,

Q: What is the required return for the overall stock market? Round your answer to two decimal p % What…

A: Beta signifies how the systematic risk and the expected return of an investment are related to each…

Q: None

A: a. Calculate the arithmetic average return on these stocks over the sample period.ABC: Arithmetic…

Q: Which one of the following stocks is correctly priced if the risk-free rate of return is 3.0 percent…

A: In this question, we are required to determine the stock which is correctly priced.

Q: iven the information below, calculate the reward-to-risk ratio implied by the CAPM pricing model.

A: The risk-reward ratio determines how much reward is there for risk of  every dollar.

Q: A stock's returns have the following distribution: Probability Rate of Return 0.1 -25% 0.2 0.4 0.2…

A: To calculate the coefficient of variation, we first determine the expected return, followed by…

Q: What is the expected return of Stock A given the information below about its returns across future…

A: Solution:- Expected rate of return means the return expected by an investor from asset by investing…

Q: None

A: The CAPM formula will be used here. stock's expected return = risk free rate + (beta*(market rate of…

Q: Calculate the expected rate of return for each stock. (2 decimal) places Stock A Expected Return %…

A: The given problem relates to risk and return associated with stocks. Expected return is computed as…