Security Returns if State of Economy Probability of State, State Occurs of Economy Roll Bust -16% Ross 20% Boom 27 7 0.30 0.70 Calculate the standard deviations for Roll and Ross by filling in the following table: Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 4 decimal places. State of Economy Probability of State of Economy Return Deviation from Expected Return Squared Return Deviation Product Roll Bust 0.30 Boom 0.70 σ² = Ross Bust 0.30 Boom 0.70 -0.0390 0.0015 σ²= Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Roll Ross Standard Deviations % %
Security Returns if State of Economy Probability of State, State Occurs of Economy Roll Bust -16% Ross 20% Boom 27 7 0.30 0.70 Calculate the standard deviations for Roll and Ross by filling in the following table: Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 4 decimal places. State of Economy Probability of State of Economy Return Deviation from Expected Return Squared Return Deviation Product Roll Bust 0.30 Boom 0.70 σ² = Ross Bust 0.30 Boom 0.70 -0.0390 0.0015 σ²= Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Roll Ross Standard Deviations % %
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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What is the market numbers for Sharpe Ratio, Treynor Ratio, and Jensen's Alpha
Transcribed Image Text:Security Returns if
State of
Economy
Probability of State,
State Occurs
of Economy
Roll
Bust
-16%
Ross
20%
Boom
27
7
0.30
0.70
Calculate the standard deviations for Roll and Ross by filling in the following table:
Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 4
decimal places.
State of
Economy
Probability
of State of
Economy
Return
Deviation from
Expected
Return
Squared
Return
Deviation
Product
Roll
Bust
0.30
Boom
0.70
σ² =
Ross
Bust
0.30
Boom
0.70
-0.0390
0.0015
σ²=
Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
Roll
Ross
Standard
Deviations
%
%
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