a 0.07248 b 0.00386 c 0.26921 d 0.00939 e 0.05175 Calculate the Variance of the Rate of Return, Var(R)?ARecessionModerateGrowthStrongGrowthProb ofState of theEconomyB0.350.50.15End-of-Year BeginningSelling Price Price of theof the Stock StockC70001200016000D100001000010000Cash Return Percentagefrom your Rate ofinvestment ReturnE=C-DF=E/DE(R) =Weightedaverage ofrate ofreturnG=BxF?Differencebetween therealized rate ofreturn theexpected rate ofreturnH=G-E(R)Var (R) =Weightedaverage ofthe squareddifferenceH^2 x 8?

A B C D E F G probability Recession 0.35 7000 10000 -3000 -0.3 -0.105 Moderate 0.5…

Answered: Calculate the Variance of the Rate of…

Business

Finance

Calculate the Variance of the Rate of Return, Var(R)?

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

See similar textbooks

Related questions

Q: Net sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable…

A: To increase sales there is need investment in assets and that investment can be managed internally…

Q: If one year of college currently costs $25,000, how much will it cost Grand Rapids, Michigan's…

A: We have to find the inflation adjusted cost of one year at college, a few years form now. We will…

Q: On her 45th birthday, Lisa Martin takes out a 20-year endowment policy with a £50,000 death benefit…

A: An endowment policy is an essential type of life insurance policy in which an insured get the full…

Q: it say 7,715.47 is incorrect

A: Cash Flow = cf = $27,500Initial Cost = i = $98,000time = t = 4 YearsCost of Capital = r = 14%

Q: d. Calculate the amount of cash Heidi's paid suppliers of retail merchandise, which includes the…

A: Statement of cash flow: It refers to a financial statement that shows all the cash payments and…

Q: Compute the total and annual return on the following investment. Two years after paying $3600 for…

A: Shares are a type of financial instrument or a financial asset. Investment can shares can give…

Q: Question 4. Compare the use one of the electronic circuits, as shown in the table below, which…

A: Terminal cash flows are the cash flows which are generated at the end of the project. Terminal cash…

Q: I don't understand where the number 19.88798 comes from

A: In this question we are provided with the factor table. Hence we will have to use the values in the…

Q: S u p p o s e t h a t s o m e o n e s t o l e y o u r A T M c a r d a n d w I t h d r…

A: The theft of an ATM card and unauthorized withdrawal from a checking account can be a distressing…

Q: A n s w e r t h e f o l l o w i n g , y o u m a y f i n d t h e a n s w e r s i n a n y…

A: Specified taxable fringe benefits are benefits provided to employees by their employer that are…

Q: Use the following table to answer the question. Periods 1 2 3 4 5 6 7 5% 7% 10% 0.93458 0.90909…

A: The estimation of the future sum of money at the current date is referred to as present value of…

Q: A n s w e r t h e f o l l o w i n g , y o u m a y f i n d t h e a n s w e r s i n a n y…

A: The choices available to taxpayers to remedy problems relating to their tax liability are known as…

Q: Explanation 1031 like-kind exchange

Q: Determine the tax liability, marginal tax rate, and average tax rate in each of the following cases.…

A: The marginal tax rate represents the highest tax rate paid by the entity, and The average tax rate…

Q: tis the value of (F/G 1. 9.4136 30.7297

A: Given information :

Q: B r i e f l y d e s c r i b e e a c h o f t h e f o l l o w i n g t y p e s o f m e r…

A: Horizontal mergers involve the combination of two companies in the same industry or market, which…

Q: M A N A G I N G Y O U R C A S H A N D S A V I N G S D e t e r m i n e t h e a n n u a l…

A: Introduction: Annual net cost of checking account: Amount charged by bank like processing fees,…

Q: EQ06 Q4. len mol fan gas yn in sletten systeem û ndergiet in fjouwer - stap thermodynamyske syklus.…

Q: Crane Corporation is considering investing in a new facility. The estimated cost of the facility is…

A: IRR Internal Rate of return is the rate of return at which the project will be at break even point…

Q: A B C a n d X Y Z a r e p r e p a r i n g t h e i r 2 0 2 3 c a s h b u d g e t . H el…

A: To reconcile the differences between X Y Z and A B C regarding their monthly income and the…

Q: Question 5.00€ vd rwob asog abnod to oulay sud zofduob soole to oulsy stylquada wat 576 251 12979ti…

A: Systematic Risk: Systematic risk, also known as market risk, is the portion of an asset's risk that…

Q: (P/A, 5%,7) has a value equals to a. 5.7864 b. 0.070 c. 8.142 d. 0.8142

A: (P/A, 5%,7) means Present Value Annuity Factor @ 5% for 7 Periods.

Q: 1. 1000 + 79000= 2. 3. 12500= 4. 163000= 48000+ 5. 1680= 118400+. = 11500 + 285000 + 5000

A: Step 1 Assets = Liabilities + Shareholder’s Equity The accounting equation is considered to be the…

Q: Y o u ’ r e g e t t I n g m a r r i e d a n d a r e u n h a p p y w i t h y o u r p r…

A: Choosing a new bank is an important decision that requires careful consideration of various factors.…

Q: B r i e f l y d e s c r i b e e a c h o f t h e f o l l o w i n g m o t i v e s f o…

A: Since you have posted multiple questions with multiple sub-parts, we will provide the solution only…

Q: 3-53 4 3-64 P-F:3-35A. Journalizing and posting adjustments to the T-accounts and preparing an…

A: Statement which involves listing of all accounts with their respective balances in one statement…

Q: Write the formula for the present value. 12 3 6 1 2 3 nnn-2 + n n+1 7+2 20-1

A: The concept of present value states that money today is more valuable than money tomorrow. In other…

Q: A s s u m e y o u ' r e J u n i o r i n c o l l a g e. G i v e t h r e e f i n a n c i…

A: The financial goals is very important for every people so it is important to manage and plan their…

Q: A 12-cylinder heavy-duty diesel engine will have a guaranteed residual value of $1,000 in five…

A: Given: Particulars Amount Amount $1,000 Years 5 Interest rate 9%

Q: m p a n y d o w n s i z e s . D e s c r i b e t h e m e a s u r e s y o u ' d t a k e…

A: As someone who graduated from college and worked for a large consumer goods company for three years…

Q: 1000 x (1+r)"

A: Given: PV = 1,000, r = 0.089, n = 13 Formula: V*(1+r)^n

Q: DJI FTSE100 DAX CAC40 NIKKEI HSI BOVESPA GOLD 4-Jan-16 15944.46 5990.4 9880.82 4380.36 17163.92…

A: A mathematical construct called a covariance matrix is used to summarize the strength and degree of…

Q: Based on the following information, what is the expected return? State of Economy Recession Normal…

A: In the given case, we have given the rate of return of each state of economy and their respective…

Q: M&M 58 Ksl and M&M63 KSl are equal

A: M&M 58 and M&M 63 -M&M refers to Modigliani and Miller and it indicates the capital…

Q: Which of the following statement is/are correct about US treasury securities? 1. All securities…

A: The US treasury securities refer to the fixed-income debt securities that are issued by the US…

Q: Al Fathma LLC manufactures a line of equipinen this year, which also has a one-year quarantee if the…

Q: I f t h e b e t a o f M a c b e t h ' s a s s e t s i s 0 . 7 5 a n d i t s d e b t i…

A: Working Note #1 No. of shares before repurchase = 2900 No. of shares after repurchase (after issue…

Q: 18 eBook References A portfolio analyst has been asked to allocate investment funds among three…

A: Portfolio return is calculated as shown below.Portfolio standard deviation is calculated as shown…

Q: W h i c h, i f a n y , o f t h e f o l l o w i n g t r a n s a c t i o n s a r e…

A: 1 a) This transaction represents an expense item since it is payment for a service ( renting a…

Q: Falkland, Inc., is considering the purchase of a patent that has a cost of $49,000 and an estimated…

A: Year Operating Cash flow 0 $ -49,000.00 1 $…

Q: A n s w e r t h e f o l l o w i n g , y o u m a y f i n d t h e a n s w e r s i n a n y…

A: Fringe benefits are additional forms of compensation that an employer provides to an employee…

Q: 3 . D e t e r m i n e t h e a n n u a l n e t c o s t o f t h e s e c h e c k i n g…

A: To determine the annual net cost of these checking accounts, we need to calculate the total fees…

Q: Calculate the covariance between the assets ProbabilityReturn AReturn B 0.08 0.07 0.01 0.15 0.5 0.35…

A: Co-variance is shown the relation ship between the stock. Positive Co-variance shown that both the…

Q: it say 6224.00 is incorrect

A: The problem is based on present worth analysis. Here, net present value of the investment and…

Q: On this question may you please explain how it came to 41880 instead of 41860

Q: 2. The following trial balance was extracted from the books of Syarikat Wawa at 31 Mac 2020: RM…

A: The trial balance at year end is given with different adjustments. We are required to prepare…

Q: e following information is provided for the first month of operations for Legal Services Inc.: The…

A: The journal entries are prepared to keep the record of day to day transactions of the business on…

Question

0.07248

0.00386

0.26921

0.00939

0.05175

Calculate the Variance of the Rate of Return, Var(R)?
A
Recession
Moderate
Growth
Strong
Growth
Prob of
State of the
Economy
B
0.35
0.5
0.15
End-of-Year Beginning
Selling Price Price of the
of the Stock Stock
C
7000
12000
16000
D
10000
10000
10000
Cash Return Percentage
from your Rate of
investment Return
E=C-D
F=E/D
E(R) =
Weighted
average of
rate of
return
G=BxF
?
Difference
between the
realized rate of
return the
expected rate of
return
H=G-E(R)
Var (R) =
Weighted
average of
the squared
difference
H^2 x 8
?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Calculation of expected Return

VIEW

Step 2: Variance of the return

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Q7
How to solve:S= 1/1.06[1-1/(1.06)^20]/1-1/1.06
None
0.2KB/s O 68 4G+ 12:18 PM O 00:41:23 Remaining Multiple Choice Which of the following is part of the PAS 38's definition of intangible assets? Future economic benefits Without physical substance Controlled by the entity Identifiable monetary assets 13 of 25
Q7 Solve the following problem Louise's taxable income is $87450. Based on the following marginal rate schedule first $45,282 taxed at 15.00%; over $45,282 up to $90,563 taxed at 20.50% How much tax should Louise be submitting to Revenue Canada Answer CLR 3 L5
500,00X 500
Find the sum of the terms: 26 O 74.23 69.38 O 71.12 O 70.29 O 72.97 (1+0.04)² + 26 (1 +0.04)³ 26 (1+0.04)4 (Round intermediate calculations to 5 decimal places, e.g. 5.27525 and your final answer to 2 decimal places, e.g. 52.75.)
T o p i c : F i n a n c i a l A n a l y s i s G i v e t h r e e p o s s i b l e c a u s e s o f t h e f o l l o w i n g : A d v e r s e d i r e c t m a t e r i a l s p r i c e v a r i a n c e. F a v o r a b l e d i r e c t l a b o r r a t e v a r i a n c e . F a v o r a b l e d i r e c t m a t e r i a l s u s a g e v a r i a n c e. A d v e r s e d i r e c t l a b o r e f f i c i e n c y v a r i a n c e. A n d e x p l a i n ho w y o u w o u l d i d e n t i f y w h i c h v a ri a n c e s t o i n v e s t i g a t e N o t e : A n s w e r s s h o u l d b e q u i t e l o n g f o r m e t o u n d e r t a n d m o r e .
Imagine an emerging market with only 15 years of data. Compute the historical ERP using the geometric mean. (Hint: Compute the annual ERP=Rm- Rrf first and then calculate the geometric mean of it). Save the data to answer Question 2. Rm Rrf 0.100 0.035 0.120 0.045 3 0.300 0.068 4 0.200 0.060 5 0.050 0.030 6 -0.030 0.020 7 0.050 0.010 0.100 0.030 0.450 0.060 10 0.230 0.050 11 0.150 0.040 12 0.100 0.030 13 0.060 0.020 14 0.020 0.020 15 -0.100 0.010 1 2
E10.15
Capital Rationing Decsion Involving Four Proposals Kopecky Industries Inc. Is considering allocating a limited amount of capital Investment funds among four proposals. The amount of proposed Investment, estimated income from operations, and net cash flow for each proposal are as follows: Project Uniform victor Sierra Tango Name Investment $900,000 Investment $2,770,865 Investment $1,762,515 Investment $1,040,013 Income Income Income Income Net Cash Net Cash Net Cash Net Cash from from from from Flows Flows Flows Flows Year Operations Operations Operations Operations $84,000 $240,000 $294,500 $950,000 $207,000 $450,000 $109,000 $390,000 84,500 240,000 294,775 950,000 207,000 450,000 109,000 390,000 85,000 240,000 295,050 950,000 207,000 450,000 109,000 390,000 85,500 240,000 295,325 950,000 207,000 450,000 109,000 390,000 5. 86,000 240,000 295,600 950,000 207,000 450,000 109,000 390,000 Total $425,000 $1,200,000 $1,475,250 $4,750,000 S1,035,000 $2,250,000 $545,000 $1,950,000 Present…
Y0: -190000 Y1: 80150 Y2: 83100 Y3: 86900 What is IRR for project?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS