Megaworld Corporation has the following returns for the past three years: 7 percent, 13 percent, and 10 percent. Use the following formulas te calculate the variance of the returns and the standard deviation of the returns: Variance (m) = expected value of (mm)² Standard deviation of m=√√variance(rm). 30.00 and 10.00% 124.00 and 11.10%

Megaworld Corporation has the following returns for the past three years: 7 percent, 13 percent, and 10 percent. Use the following formulas te calculate the variance of the returns and the standard deviation of the returns: Variance (m) = expected value of (mm)² Standard deviation of m=√√variance(rm). 30.00 and 10.00% 124.00 and 11.10%

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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Maroon has an expected return of 21%, and a variance of 0.014. Gray has an expected return of 15%, and a variance of 0.009. The covariance between Maroon and Gray is 0.06. Using these data, calculate the variance of a portfolio consisting of 55% Maroon and 45% Gray. 0.18910 0.03576 0.01175 0.03526 0.00794
We have 50 years of annual data on (detrended) ex post prices P∗ t and on (detrended) actual stock prices Pt . We find that the sample variances (svar) are as follows: svar(P∗ t ) = 120 and svar(Pt) = 80. What does this tell us and why?
Consider Microsoft Corporation (MSFT) and Meta Platforms, Inc. (META) that have returns variances of 6.25% and 3.24%, respectively. Calculate the standard deviation of portfolio returns for an equal-weighted portfolio of the two assets when their correlation of returns is 0. A. 24.71% B. 19.20% C. 15.40% D. 10.28%
The following table has expected returns and variance-covariance of five stocks. The T-Bill rate is 3. Variance-Covariance Returns V F GM WMT Y V 27.226 588.659 -275.078 -319.948 -36.805 -93.170 F 11.653 -275.078 5716.621 22.772 56.588 52.187 GM 4.633 -319.948 22.772 729.510 569.730 -258.506 WMT 12.905 -36.805 56.588 569.730 932.361 367.376 Y 6.908 -93.170 52.187 -258.506 367.376 1466.966 T-Bill 3.000 questions a) determine the Tangency portfolio weights and calculate its expected return, standard deviation and Sharpe Ratio. Assume short sales are allowed. Write the equation of risk-return relations. b) determine the Tangency portfolio and calculate its expected return, standard deviation and Sharpe Ratio assuming…
You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 17 percent, -4 percent, 20 percent, 12 percent, and 10 percent. a. What was the arithmetic average return on Crash-n-Burn's stock over this five-year period? (Round your answer to 1 decimal place. (e.g., 32.1)) Average return % b-1What was the variance of Crash-n-Burn's returns over this period? (Round your answer to 5 decimal places. (e.g., 32.16161)) Variance b-2What was the standard deviation of Crash-n-Burn's returns over this period? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Standard deviation %
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The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.00 and a residual standard deviation of 30%. Calculate the total variance for an increase of 0.10 in its beta. A. Total variance will increase from 2,500 to 2,664. B. Total variance will increase from 2,500 to 2,774. C. Total variance will increase from 2,600 to 2,664. D. Total variance will increase from 2,600 to 2,774.
Expected Return and risk of Hitech Ltd. is 13% and variance 225 % square and Expected Return and risk of Sigma Ltd is 18 % and 400 % Square, the Correlation Coefficient between the two is 0.2. Find the minimum variance portfolio. Also find the return and risk of the minimum variance portfolio. Clearly show the diversification benefit ?
The last four years of returns for a stock are as shown here: a. What is the average annual return? b. What is the variance of the stock's returns? c. What is the standard deviation of the stock's returns? Note: Notice that the average return and standard deviation must be entered in percentage format. The variance must be entered in decimal format. Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 4 Return +3.51% 1 - 4.17% 2 +27.82% 3 + 11.88% X
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