Compute the standard deviation of the expected return given these three economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast Growth 0.2 30% Slow Growth 0.5 6% Recession 0.3 −2%

Q: Consider the following information:            State of Economy Probability of State of Economy Rate…

A: The expected return is the anticipated amount of profit or loss from an investment. The expected…

Q: Consider the following information: State of Economy Recession Boom Probability of State of Economy…

A: State of economyProbabilityRate of return if state occursRecession0.39-0.13Bust0.610.25

Q: Which of these two companies is best for investment?  Trend Probability Rate of Retrun (Company A)…

A: We need to calculate expected return rate of return from investment by multiplying the probability…

Q: The annual growth rate of your investment can be measured by A. THE ANNUAL MEAN OF YOUR ANNUAL…

A: Several methods have been prescribed to measure the annual growth rate of an investment. We have to…

Q: Consider the following information: State of Economy Recession Boom Probability of State of Economy…

A: The expected return refers to the weighted average profits that the investment provides after…

Q: If you perform a NPV analysis on a perspective investment using a "d" = 15% and:       a. the…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: The probability distribution of the returns of two assets, A and B, are shown in the table below.…

A: The combined variability of two variables is described by covariance. When there is a positive…

Q: Given an expected return of 8% and a standard deviation of 9%, we can predict that there is a _____…

A: Given: Expected Return/Mean = 8% Standard deviation σ = 9% Observed Values = -19% and 35% Using the…

Q: use those estimates to calculate the expected FF3 monthly return

A: Using multiple linear regression, we are going to determine the alpha and beta of the each of the…

Q: Consider the following information about the various states of economy and the returns of various…

A: Here, Probability T-Bills Philips Pay-up Rubber-Made Market Index 0.2 7% -22% 28% 10% -13%…

Q: Consider an investment for which the expected returns are normally distributed with an expected…

A:

Q: Consider the following information about the various states of economy and the returns of various…

A: The formula for calculating Mean, Standard deviation, and coefficient of variation with probability…

Q: Plot the Security Market Line (SML)  Superimpose the CAPM’s required return on the SML Indicate…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: R

A: Formula for expected return: E(r) = R1P1 + R2P2...........RnPn Variance = p1[R1 - E(r))^2…

Q: Which of the following is (are) correct regarding average returns? A B The geometric mean is a…

A: In finance the geometric average return is a way to figure out the rate of return, on an investment…

Q: Assume you are given the following information regarding the expected returns for an asset, for…

A: Formulas used: Expected return = Sum of (Probability of state* Return in that state) Standard…

Q: State of Economy Probability of State Return on Asset D in State Return on Asset E in State Return…

A: Expected Return Mean = sum of (Probability * Return)

Q: Please find out expected return and variance of following investment opportunity. Probability Rate…

A: The Return anticipated or estimated to be generated from the project is known as expected return.…

Q: Question 1 - Expected Return Probability 0.3 0.2 05 What is the expected return of the following…

A: Expected return is the most likely rate of return that is going to be achieved from the investment…

Q: If the nominal rate is 10% and the inflation rate is currently 4.2%, what is the real rate of…

A: Irving Fisher developed the economic theory known as the "Fisher Effect," which explains how…

Q: 2. Given the following historical returns, calculate the average return and the standard deviation:…

A: standard deviation = square root of (sum of (Return-average)^2)

Q: What is required // calculate the required rate of return with an opinion on acceptance or rejection…

A: Rate of return is the return is the return received from an investment. It is the real return…

Q: Based on the following information, what is the standard deviation of returns? State of Economy…

A: The standard deviation shows the average volatility in the returns of the stock.It shows to what…

Q: If you want to have 14,000 at the end of year 5, how much should you have to save each year if the…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: Consider the following information: State of Economy Recession Boom Probability of State of Economy…

A: Expected return = Sum of ( Rate of return x Probability of the return)=>Expected return =(Rate of…

Q: Unadjusted payback period 2a. ARR based on initial investment 2b. ARR based on average investment 3.…

A: Hi studentSince there are multiple subparts, we will answer only first three subparts. Initial…

Q: There are three possible states of economy-Boom, Growth or Recession and the returns on Ihser and…

A: When investor invest his money, he assumes to earn something on his investment for the period of…

Q: If you have a weighted value of 12.8% and a return of 16% what is the probability? a. 10% 129/

A: Given: Weight = 12.8% Return = 16%

Q: Consider an investment with the following probability distribution:   Probability Payoff 0.40 30.0…

A: Probability is the expectation or estimate which is forecasted. For calculation of expected return,…

Q: Using the table below, calculate the standard deviation of the portfolio Demand for Company Products…

A: Demand Probability Rate of returnWeak 0.2-30%below average0.1-15%Average0.410%Above…

Q: Single Cash Flow Future Value Inputs Single Cash Flow Discount Rate/Period 747.25 6.00% Number of…

A: Future value is generally calculated by compounding the present value of cash amount .   Future…

Q: The following investments and probabilities are presented:…

A: An investor can determine the performance and riskiness of investment by evaluating expected return,…

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

A: Given:

Q: Consider the following information:   State of Economy Probability of State of Economy Rate of…

A: In the case of probabilistic data, return is calculated by multiplying each return by its respective…

Q: Given the following information, compute the standard deviation for Investment A:   Payoff…

A: LetX: Pay off then PMF of X is given byxP(x)300.6150.3-120.1Now from the Table we…

Q: What is the risk premium for the following returns if the risk-free rate is 4%?   State…

A: State Probability Return Boom .25 .25 Good .50 .10 Recession .25 0…

Q: 14. Consider the following possible returns over the next year on an asset Return probability -£40…

A: Expected return = ∑p*r Variance = ∑p*(r-E(r))2

Q: Illustrate a decision-tree diagram of the table below, calculating the expected values from the…

A: Two investments have been listed. The outcomes are probabilistic in nature. We have to represent the…

Q: Using the CAPM formula, make up numbers for the risk-free rate, beta and the MRP. Describe 3 ways to…

A: CAPM stands for Capital Asset Pricing Model, a widely used financial model that helps investors and…

Q: If the expected inflation rate is 3.45%, the realized real rate of return is 3.80%, and the actual…

A: Expected Inflation Rate is 3.45% Realized Real Rate of Return is 3.80% Actual Inflation Rate is…