calculate the standard deviation of returns.

Q: Define standard deviation

A: It refers to the variation in the actual observations from the average. Z-Score helps to know how…

Q: Begin by selecting the formula to compute the current ratio.   Current ratio formula =…

A: Current ratio: The financial ratio which evaluates the ability of a company to pay off the debt…

Q: What is the expected return? What is the variance? What is the standard deviation?

A: State Probability Returns       Boom 0.25 0.15 Normal 0.50 0.08 Slow down 0.15 0.04…

Q: The regression analysis is normally depicted as "y = Ax+ B." What does "A" indicate in the equation?…

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Q: Which cell or column is used for the covariance?

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

Q: The efficient frontier measures risk by using: Group of answer choices B. Correlation A. Risk-free…

A: Efficient frontier refers to the graphical representation of the set of optimal portfolios…

Q: I need the Standard Deviation formula and how to solve it, please

A: Formula for population standard deviation for N data points in a population  is given by:

Q: Expected return and standard deviation. Use the following information to answer the questions: a.…

A: Expected return, variance and standard deviation of each asset is calculated in excel

Q: Define the following terms: Factor risk premium Unit root Random walk with drift…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: Explain favourable variance.

A: Definition:   Variance analysis: Variance analysis is the process of evaluating the differences…

Q: Calculate the following and determine if variances are favorable

A: Compute the total standard material cost.

Q: The variance and its square root, the standard deviation, are the most commonly used measures of…

A: Variance refers to the expectation of squared deviation of a random value from its arithmetic mean.…

Q: Experimental outcomes that are based on measurement scales such as time, weight, and distance can be…

A: The correct answer is: (C) Continuous  Continuous random variables are variables that can take on…

Q: Define variance

A: Variance in statistics is the calculation of the distribution in an information source between the…

Q: Variance percentage is calculated by dividing the choose your answer... by the choose your answer...

A: Variation refers to the difference i.e. the difference between the current amounts with the budgeted…

Q: Distinguish between a favorable variance and an unfavorable variance.

A: Favorable Variance: Favorable variance is the variation in the actual and planned output which is…

Q: What type of testing are ratios?

A: Ratio:   It is a number expressed in terms of another to establish a relationship among them.

Q: Calculate the current ratio

A: The current ratio is the ratio of current assets to the current liabilities. It shows the ability of…

Q: he variance of expected returns is equal to the square root of the expected returns. a. True b.…

A: Formula for variance:S2=∑(Xi-X̄) 2/n S2=VarianceXi=Value of one observationX̄=Mean value of all…

Q: Explain Key Statistical Relationships between Covariance and Correlation of Returns?

A: Covariance:It is defined as the statistical relationship between stock prices of stock that vary…

Q: Differentiate between variance analysis and sensitivity analysis

A: Managers of small businesses can benefit from both variance and sensitivity analyses when trying to…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.