State of Economy Bust Boom Probability of State of Economy 0.40 0.60 Security Returns if State Occurs Roll Ross -10% 21% 28 8 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 calculation decimal places.

Q: Please answer both QUESTION 5 Which of the following is not a reason why beta may differ between…

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Q: values. All other answers Risk-Adjusted Performance Measures s Sharpe Ratio be put ail Treynor's…

A: Risk adjusted measures are used to determine the reward an investor would get for taking that amount…

Q: Consider the following information: State of Economy Recession Boom Probability of State of Economy…

A: State of economyProbabilityRate of return if state occursRecession0.39-0.13Bust0.610.25

Q: State of Economy Bust Boom Security Returns if Probability of State, State Occurs of Economy Roll…

A: It is difficult to arrive at a single accurate figure of the rate of return as it is affected by…

Q: Risk-Adjusted Performance Measures Sharpe Ratio Treynor's Measure Information Ratio A 0.4750 -0.0082…

A: Risk adjusted measures are used to determine the reward an investor would get for taking that amount…

Q: Over a particular period, an asset had an average return of 12.1 percent and a standard deviation of…

A: Expected return of an asset is the profitability of investing in that asset. It is the percentage of…

Q: What is the standard deviation of asset​ M?

A: Standard deviation tells us how much the expected vary from the actual result.

Q: Which of the following break-even analyses yields a negative net present value? I. accounting…

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Q: ased on the following information, what is the variance? State of Economy Recession Normal Boom…

A: Probability recession = p1 = 0.30Probability normal = p2 = 0.39Probability boom = p3 = 0.31 Return…

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: What is the standard deviation given the following information? Probability Possible Returns 24.0%…

A: Probability (P)Possible Returns0.2524.0%0.2036.0%0.559.0%Required:Standard Deviation =?

Q: Over a particular period, an asset had an average return of 5.8 percent and a standard deviation of…

A: Expected return of an asset is the profitability of investing in that asset. It is the percentage of…

Q: Assume that 1 unit of Currency Y costs 0.49 units of Currency X, 1 unit of Currency Z costs 7.99…

A: Cross exchange rates Cross exchange rates are used to determine the true exchange rate between…

Q: Assume you are given the following information regarding the expected returns for an asset, for…

A: Formulas used: Expected return = Sum of (Probability of state* Return in that state) Standard…

Q: Based on the following information, what is the standard deviation of returns? State of Economy…

A: The standard deviation shows the average volatility in the returns of the stock.It shows to what…

Q: Calculate :  M2 measure T2 measure Information Ratio (appraisal ratio) Fund  Average return…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…

Q: Consider the following information: Rate of Return If State Ocurs State of Probability of State of…

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Q: 11. An investor will place one-third of his money into security 1, one-sixth into security 2, and…

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Q: There are two risky assets, and their volatilities are 8% (Asset 1) and 24% (Asset 2). Their return…

A: If two Assets (i.e Asset 1 and Asset 2) are perfectly negatively correlated i.e their return…

Q: absolute

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Q: Consider the following information: State of Economy Recession Boom Probability of State of Economy…

A: Expected return = Sum of ( Rate of return x Probability of the return)=>Expected return =(Rate of…

Q: Expected Return, Variance, Std. Deviation and Cofficient of Variation: Magee Inc.'s manager believes…

A: The standard deviation of the stock is the measure of the deviation of the stock's return from the…

Q: Calculate to at least four decimal places, answers should be stated as percentages to two places for…

A: Internal rate of return Internal rate of return refers to the exact return that investment is…

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A: Formulas:

Q: Present value calculation Without referring to the preprogrammed function on your financial…

A: In this question, we are required to determine the present value of $1, to be received in 6 years…

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A: Given:

Q: 3. Security A has the following probability distribution of returns: Scenario Probability Return 0.1…

A: Calculation: Formula snip:

Q: coefficient variation=.55 positive coeficient of correlation =.20 expected value=$1200 What does…

A: The measure that is used to calculate the dispersion of dataset is called the standard deviation. It…

Q: Assuming that the rates of return associated with a given asset investment are normally distributed;…

A: a) Calculation of standard deviation:Standard deviation is 0.3516.Standard deviation can be derived…

Q: What is the expected percentage change in the value of the foreign currency (e) if you combine all…

A: Expected % change= (Technical forecasting % + Fundamental forecasting % + Market based forecasting)…

Q: None

A: Let's break down the correct answers for each part of the question based on the uniform distribution…

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.