Date 1 Mo N/A N/A N/A 01/02/01 01/03/01 01/04/01 3 Mo 5.87 5.69 5.37 6 Mo 1 Yr 5.11 5.04 5.58 5.44 5.20 2 Yr 4.82 4.87 4.92 5.14 5.03 Look at the yields for 01/02/01 in the above table. Which of the following best describes the shape of the yield curve at that time? OA. Inverted OB. Normal O C. Flat O D. Upward-Sloping 3 Yr 4.82 4.92 4.78 4.92 4.77 5 Yr . 7 Yr 4.76 4.94 4.82 10 Yr 4.97 5.18 5.07

Q: Using the following returns, calculate the arithmetic average returns, the variances, and the…

A: It has been provided: Required: Asset X:   Average return   ? Variance   ? Standard…

Q: Find the average of x for the following data: 16,33 ,50, 28, 50, 25

A: the resultant number obtained by adding two or more figures together, then dividing the sum obtained…

Q: For a set of positively correlated data, you calculate that 84% of the variation in the dependent…

A: The coefficient of determination (R-squared) represents the proportion of the variation in the…

Q: The geometric average of -12%, 20%, and 27% is 10.50" for 10.5%) (Type your answer as a percent, two…

A: We need to use geometric average return equation below.Geometric average =…

Q: • If the actual value of a time series at time t and the forecast value for time t is denoted by At…

A: Option A: The correct formula for Mean Absolute Deviation Option B: It is the formula for Mean…

Q: A regression line has an intercept value of 174.71 and slope value of 25.22. What is the predicted…

A: The predicted value (the y-value) of Y is defined as the predicted value of a dependent variable.…

Q: can you solve this question step by step in very detail and answer those a,b,c. this is so important…

A: a) Data Cleaning and Exploration:Import libraries: You'll need libraries like pandas for data…

Q: Calculate the standard deviation of the following returns.  Year       Return 1             0.25…

A: Explanation : Standard deviation is measure the risk which is involved in earning of that particular…

Q: a. If Sharon were risk neutral, which investment would she select? Explain why. b. If she were risk…

A: Risk Neutral-This type of investor is insensitive to risk i.e., while making investment decision,…

Q: The following is a set of data from a sample of n =11items Complete parts​ (a) through left…

A:

Q: Find the numerical value of the factor (A/P, 30%,22).

A: We have; Capital Recovery function (A/P,30%,22) To Find: Numerical Value of the Function

Q: The standard deviation of IWM return and  the standard deviation of EEM return?

A: Here, To Find: Standard deviation of IWM =? Standard deviation of EEM =?

Q: What is the total variance of the following portfolio including 2 assets invested in the ratio of…

A: Formula to be used: Portfolio variance=(WA2 x σ2A)+(WB2 x σ2B)+ (2 x WA x σA x WB x σB x r) Data…

Q: Use what you know about percentages to evaluate the following expressions and fill in the blanks,…

A: Percentage is the ratio which is obtained by dividing the PART by the WHOLE. In other words, when we…

Q: find the trynors ratio for q and compare it to treynor ratio for m does this analysis indicate…

A: Here,Beta q is 1.25rf is 2%rm is 12%rq is 13.5%

Q: If i = 296, the value of X in the following CFD is nearest to: 100 100 100 100 100 Selected Answer:…

A: IRR means internal rate of return which means that percentage where present value of cash inflow and…

Q: b. Prepare a vertical analysis of the segment data. Round all percents to one decimal place and…

A: Vertical analysis is a measuring tool for analyzing and interpreting the financial statements of…

Q: Depending on the demand for your product, your sales are expected as follows: Demand Prob. Sales Low…

A: Here, Market Value of Equity is 430 No. of Shares is 40 EBIT is 23% Sales Tax Rate is 34% After…

Q: Suppose we have the following values for variables X and Y: XY 06 13 20 What is the value for the…

A: Solution:Correlation coefficient measures the degree of relationship between two variables. If it is…

Q: Q10. For a general reaction A →→ B, the plot of concentration of A vs time is given in Fig. Answer…

A: (a) Order of the Reaction:Reaction Order: The order of a reaction tells us how the rate of the…

Q: In creating the T2 measure one mixes P* and T-bills to match the _____ of the market and in creating…

A: Introduction: Treasury bills are instruments issued by US government which are of short term nature…

Q: Use the following returns for X and Y. Year PA234S 1 5 Returns X 21.6% -16.6 9.6 19.2 4.6 Y 25.8%…

A: The standard deviation measures the level of risk associated with stock, whereas the average return…

Q: Please fill out the table below. Use your estimates from the table to answer the multiple-choice…

A: Calculations are done using excel. Note, answer closest to the calculation are chosen from the…

Q: The Cox-Ross-Rubinstein (CRR) model is a Binomial tree in which the up and down factors are given…

A: Up factor, u =  e^(σ sqrt(h)) Down factor d = e^(−σ sqrt(h)) Volatility parameter = σ length of…

Q: How do you calculate the value at a node in a binomial tree? A. As a present value of the two…

A: A binomial tree is a graphical representation of the different intrinsic values that an option could…

Q: Using horizontal analysis, the increases and decreases are shown as O a. amounts for the highest…

A: The horizontal analysis is a method of reviewing the financial statement of the company for multiple…

Q: Which one of the following is defined as the average compound return earned per year over a…

A: In every business, amounts are being invested for the purpose of calculating and earnings returns.…

Q: A linear regression model is Units = 4,004 – 0.659×Week. For week 46, what is the forecast for the…

A: Units = 4004 – 0.659 * WeekNumber of Weeks = 46

Q: Calculate the geometric mean return for the following data set: (Negative value should be indicated…

A: -14% = -0.14,15% = 0.15,-16% = -0.16,13.7% = 0.137,14.1% = 0.141.

Q: The probability distributions of expected returns for the assets are shown in the following table:…

A: We need to compute return and standard deviation for asset A.

Q: Question 4 Listen Match the trigonometric ratio to the correct Cartesian ratio. Not all options will…

A: Step 1:Let's find tanθ,cosθ and sinθ:Let's assume that:x:"represents the length of the side adjacent…

Q: Please help do this calculation step by step I have problems getting the final answer.

A: Calculating the value of weighted-average cost of capital (WACC). We have,WACC = (Weight of Equity x…

Q: Required information Consider the following factors. 1. (FIP,21%,34) 2. (A/G,21%,45) Find the…

A: Single-Payment Compound-Amount(F/P): It refers to the single payment that is due at the end of a…

Q: How do you find the maximum profit and loss percentage using these graphs? Long put Payoff Kluss st…

A: A put option is a financial instrument in which the holder is granted the ability, but not the…

Q: Consider the following POPULATION of returns: 5%, -4%, -3%, and 12%. What is the standard deviation…

A: Returns 5% -4% -3% 12% 6.50%

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.