Consider the following information:StateProbabilityiof State iActualReturnofJohnsonandJohnsonBoom78 %21 %Bust22%1%What is the variance of Johnson and Johnson? (Roundto 6 decimals) (Remember Variance is not inpercentage terms!)Answer:

Step 1: Expected Return (Mean)Expected Return = (Probability of Boom * Return in Boom) +…

Answered: Consider the following information:…

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

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Use the following returns for X and Y. Returns Year 1 22.8% 29.4% - 17.8 10.8 4.8 31.4 4 21.6 - 16.6 5.8 35.4 a. Calculate the average returns for X and Y. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the variances for X and Y. (Do not round intermediate calculations and round your answers to 6 decimal places, e.g., 32.161616.) c. Calculate the standard deviations for X and Y. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Y a. Average return % % b. Variance с. Standard deviation %
Calculate the project's coefficient of variation. (Hint: Use the expected NPV.) Squared dev. Prob. NPV NPVI - E{NPV) Squared deviation times probability 0.24 S6,289.81 $5,829 SS 0.24 -$2,390.74 -S2,852 SS 0.32 -S1,233.33 -S1,694 $$ 0.20 -$ 400.00 -$861 SS 1.00 $ 461.11 Variance S Standard deviation $ 5.87 6.52 7.25 7.97 8.77
If two stocks have variance σ^2=16 each, could their covariance be equal to σ12 = 20
Given the following information, determine the beta coefficient forStock L that is consistent with equilibrium: r⁄L = 10.5%; rRF = 3.5%; rM = 9.5%.
Which of the following statements are correct? I.The standard deviation is a measure of risk.II.The variance of yearly returns is roughly the variance of monthly returns multiplied with 12.III.To decide whether asset A is more risky than asset B we can either use their standard deviations or their variances. Group of answer choices II and III only I, II and III I and II only I and III only
Use the following returns for X and Y. Year 1 2 3 4 5 Returns X 22.1% -17.1 10.1 20.2 5.1 Y 27.3% -4.1 29.3 -15.2 33.3 a. Calculate the average returns for X and Y. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. Calculate the variances for X and Y. Note: Do not round intermediate calculations and round your answers to 6 decimal places, e.g., .161616. c. Calculate the standard deviations for X and Y. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. X Answer is complete but not entirely correct. X 8.06 a. Average return b. Variance c. Standard deviation 136.454400 % 11.67 X % Y 14.04 377.286400 x % 19.42%
Use the following returns for X and Y. Returns Year x y 1 21.8% 26.4% 2 -16.8 -3.8 3 9.8 28.4 4 19.6 -14.6 5 4.8 32.4 a. Calculate the average returns for X and Y. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the variances for X and Y. (Do not round intermediate calculations and round your answers to 6 decimal places, e.g., 32.161616.) c. Calculate the standard deviations for X and Y. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
risk and return
What is the Variance of returns for Security XYZ?
Mean and Variance of Discrete Random Variable and the Characteristics of Normal Random Variable Example 1: Suppose that you are given the option of two investment portfolios, A and B, with potential profits and the associated probabilities displayed below. PORTFOLIO A Profit X -2,000 -4,000 3,000 5,000 PROBABILITY P(x) 0.3 0.1 0.3 0.3 PORTFOLIO B Profit X -3,000 -2,000 4,000 5,000 Probability P(X) 0.2 0.2 0.4 0.2 Calculated Mean and Standard Deviation for Portrollo A: Mean = 1,400 and standard deviation = 3,322.65 Calculated Mean and Standard Deviation for Portrollo B: Mean=1,600 and standard deviation= 3,882.31 A. using the mean and variance of portfolio A, interpret the result B.Based on the expected profits, which portfolio will you choose?
4. Using the following returns, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. Year 1 2 3 4 5 X 12% 28% 9% -7% 10% Return Y 25% 34% 13% -27% 14%

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Consider the following information: State Probability i of State i Actual Return of Johnson and Johnson Boom 78 % 21 % Bust 22% 1% What is the variance of Johnson and Johnson? (Round to 6 decimals) (Remember Variance is not in percentage terms!) Answer: