Please Give Step by Step AnswerOtherwise i give DISLIKES !! Consider the following information:State ofProbability ofEconomy State of EconomyRate of Return if State OccursStock AStock BStock CBoom.15.350.450.330Good.45.120.100.170PoorBust.35.05.010-.110.020-.050-.250-.090a. Your portfolio is invested 30 percent each in A and C and 40 percent in B. What is the expected return of the portfolio?Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16b. What is the variance of this portfolio?Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.c. What is the standard deviation of this portfolio?Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16a. Expected returnb. Variancec. Standard deviation%%

### Final Results:a. Expected return: 22.12%b. Variance: 0.07528c. Standard deviation: 27.45%

Answered: Consider the following information:…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 13MC: Which of the following discounts future cash flows to their present value at the expected rate of...

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Consider the information for assets A, B, and C below: Probability Return on A 0.2 0.4 0.4 State Boom Average Bust 0.3 0.2 0.1 Return on B Return on C 0.05 9.15 0.2 0.1 0.25 0.3 Consider Portfolio (Y) comprising 60% Asset A and 40% Asset C. What is the variance of portfolio Y™?
Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C Boom .15 .35 .45 .27 Good .55 .16 .10 .08 Poor .25 -.01 -.06 -.04 Bust .05 -.12 -.20 -.09 a) Your portfolio is invested 40 percent each in A and C, and 20 percent in B. What is the expected return of the portfolio? b) What is the variance of this portfolio? The standard deviation? Stock C .45 .27 .10 .08 -.06 -.04 -.20 -.09
Using the table below, calculate the Standard Deviation of the portfolio: Demand for Company Products Probability of this Demand Occurring Rate of Return if this demand Occurs (k) Weak 0.15 -30% Below average 0.25 -15% Average 0.25 10% Above Average 0.20 25% Strong 0.15 45%
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Asset (A) Asset (B) E(RA)=10% E(RB) = 15% (σA)=8% (GB) = 9.5% WA = 0.25 WB = 0.75 COVA.B = 0.006 What is the standard deviation of this portfolio? O 13.75% O 8.79% O 12.5% O 7.72%
Consider the following information: Rate of Return if State Occurs State of Probability of State of Economy Stock A Stock B Stock C Economy Boom 0.15 0.32 0.42 0.33 Good 0.45 0.19 0.13 0.12 Poor 0.30 -0.05 -0.08 -0.06 Bust 0.10 - 0.16 -0.28 0.09 a. Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the expected return of the portfolio? (Round your answer to 2 decimal places. (e.g., 32.16)) Expected return % b-1What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places. (e.g., 32.16161)) Variance b-2What is the standard deviation? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Standard deviation %
Consider the following information: Rate of Return if State Occurs Probability of State- State of Economy of Economy Stock A Stock B Stock C Boom .15 .31 .41 .21 Good .60 .16 .12 .10 Poor .20 -.03 -.06 -.04 Bust .05 -.11 -.16 -.08 a. Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) b-2. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Suppose that a two-factor model, where the factors are the market return (Factor 1) and the growth rate of industrial production (Factor 2), correctly describes the return generating processes of all assets and the corresponding two-factor APT correctly prices three well- diversified portfolios, A, B, and C. Expected Return Portfolio A BC с 15% 20% 6% Sensitivity to Factor 1 1 1 0 Sensitivity to Factor 2 0 1 0 a. What are i) the risk premiums of the two factors and ii) the risk-free rate? b. Another well-diversified portfolio D has sensitivities 0 and 1 to factor 1 and factor 2, respectively. What is the APT-consistent expected return on Portfolio D? c. Suppose that Portfolio D's expected return is 10%. Given your answers above, form a portfolio consisting of Portfolios A, B, C, and D that generates an arbitrage profit. Express the other portfolio weights by using that of D as the numeraire- 1 or -1. Show your workings.
Consider the following information: Rate of Return if State Occurs Probability of State State of Economy of Economy Stock A Stock B Stock C Boom .20 .35 .45 .25 Good .45 .20 .16 .09 Poor .25 -.02 -.05 -.03 Bust .10 -.16 -.20 -.12 a. Your portfolio is invested 24 percent each in A and C, and 52 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) b-2. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Expected return b-1. Variance b-2. Standard deviation % %
Consider the following information: Probability State of of State of Economy Boom Good Foor Bust Economy 0.20 0.25 0.10 0.45 Variance Rate of Return if State Occurs Stock A 0.19 0.16 0.00 -0.00 Stock B 0.38 0.23 -0.09 -0.32 Standard deviation Stock C 0.28 0.10 a. Your portfolio is invested 25 percent each in Stocks A and C and 50 percent in Stock B. What is the expected return of the portfolio? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Expected return -0.05 -0.10 b-1. What is the variance of this portfolio? Note: Do not round intermediate calculations. Round your answer to 5 decimal places. b-2. What is the standard deviation? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Portfolio Management A particular firm’s portfolio is composed of two assets, which we will call" A" and "B." Let X denote the annual rate of return from asset A, and let Y denote the annual rate of return from asset B. Suppose that E(X) = 0.15, E(Y) = 0.20, SD (X) = 0.05, SD (Y) = 0.06, and CORR (X, Y) = 0.30. (a) What is the expected return of investing 50% of the portfolio in asset A and 50% of the portfolio in asset B? What is the variance of this return? (b) Replace CORR (X, Y) = 0.30 by CORR (X, Y) = 0.60, 0, -0.30, and -0.60 and answer the questions in part (a). What is the impact of correlation on the expected returns and its variance? Explain why this is so. (c) Suppose that the fraction of the portfolio that is invested in asset B is f, and so the fraction of the portfolio that is invested in asset A is (1 – f). Let f vary from f = 0.0 to f = 1.0 in increments of 5% (that is, f = 0.0, 0.05, 0.10, 0.15, ...), and compute the mean and the variance of the annual rate of…
Consider a single-index model economy. The index portfolio M has E(RM ) = 6%, σM = 18%.An individual asset i has an estimate of βi = 1.1 and σ2ei = 0.0225 using the single index modelRi = αi + βiRM + ei. The forecast of asset i’s return is E(ri) = 12%. rf = 4%. a) According to asset i’s return forecast, calculate αi. (b) Calculate the optimal weight of combining asset i and the index portfolio M . (c) Calculate the Sharpe ratio of the index portfolio M and the portfolio optimally combiningasset i and the index portfolio M .
For each of the cases shown in the following table, use the capital asset pricing model (CAPM) to find the required return and explain your answer. Case Risk-free rate Market return Beta (%) (%) 8 A 5 1.3 В 8. 13 0.9 C 9 12 -0.2 D 10 15 1.0 E 10 0.6

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