State of the Economy Probability Stock W's Return Recession 0.1 -36% Below Average 0.2 -15% Average 0.4 18% Above Average 0.2 30% Boom 0.1 48% Stock W's expected returns is QUESTION 16 Stock W's standard deviation of returns is approximately QUESTION 17 Stock W's standard coefficient of variance (CV) is QUESTION 18
Q: Probability of Rate of Return if State Occurs State of Economy 21 61 Economy Recession Stock A Stock…
A:
Q: Given the following information, what is the variance of the returns on this stock? State of Economy…
A: Variance refers to the deviation from the standards, and it implies the range to within which the…
Q: EXPECTED RETURN A stock’s returns have the following distribution: Demand For the…
A: Given information: Demand For the Company’s Products Probability of this Demand Occurring Rate…
Q: Consider the following information: Rate of Return If State Occurs State of Probability of State of…
A: Expected Return Expected return of an investment is calculated by multiplying the expected value of…
Q: Quantitative Problem: You are given the following probability distribution for CHC Enterprises:…
A: Calculation: Formula snip:
Q: What is the standard deviation of the returns on a stock given the following information?…
A: Standard deviation formula: standard deviation=∑i=1nxi-expected return×piwhere,XI= rate of return of…
Q: XYZ stock's returns will have the following probability distribution during the possible states of…
A: a) Expected Return = Square root of sum of (Probability * Return) b) Standard Deviation = Square…
Q: 15 [Question text] Based on the following information, what is the expected return for the following…
A: Expected return = (Boom probability x Boom rate of return) + (Normal probability x Normal rate of…
Q: You have been given this probability distribution for the holding-period return for a stock:…
A: Variance = sum of [probability * (Return - Mean of Return)]
Q: 6. Consider stocks A and B with the following past returns: Month 1 2 4 A 7% 8% 4% 6% 4% 5% 8% 2% a.…
A: GIVEN, month A B 1 7% 4% 2 8% 5% 3 4% 8% 4 6% 2%
Q: onsider the following information: Probability of State of Economy Rate of Return if St Occurs Stoc…
A: Expected return of the stock depends the return under the probabilistic scenario of the different…
Q: The stock of Tristar Bank will have a loss of 10.8 percent in a slow economy, a return of 10.6…
A: Excel Spreadsheet:
Q: Stock W has the following returns for various states of the economy: State of the Economy…
A: Standard Deviation is the measurement of the spread of the returns in relation to their mean.
Q: Demand for the Probability of This Rate of Return If Company's Products Demand Occurring This Demand…
A: A ratio that provides information regarding the return of a security to the investor in comparison…
Q: ere are the returns on two stocks. Digital Cheese…
A: Risk, Variance, and Standard Deviation: The possibility that the actual returns will be different…
Q: k W has the following returns for various states of the economy: State of the Economy Probability…
A: The mean return is expected probabilistic return considering the different state of economy and…
Q: Consider the following information: Rate of Return If State Occurs State of Probability of State of…
A: Given: State of economy Probability Stock A Stock B Recession 0.22 0.07 -0.22 Normal 0.52 0.1…
Q: a. Calculate the expected return for Stocks A and B. (Do not round intermediate calculations and…
A: Expected return refers to the return earn by an investor on the amount invested during a period of…
Q: economic state stock A stock B depression -0.20…
A: Since you have not mentioned the specific question we will just answer the first question in case…
Q: EXPECTED RETURN A stock's returns have the following distribution: Probability of Being in This…
A: Working note:
Q: Suppose financial analysts believe that there are four equally likely states of the economy:…
A: THERE ARE MANY QUESTIONS IN THIS. ANSWER OF ONLY FIRST 3 SUBPARTS OF QUESTION WILL BE PROVIDED. FOR…
Q: An analyst has estimated how a particular stock’s return will vary depending on what will happen to…
A: The standard deviation is the variability in the returns of the stock.
Q: Stock W has the following returns for various states of the economy: State of the Economy…
A: The expected return is the weighted average return that an investor will get for their investment.…
Q: The following table shows historical beginning-of-year prices for two stocks. A B C Year Stock A…
A: 1 Year Stock A Stock B 2 2014 33.47 575.35 3 2015 31.54 569.84 4 2016 30.91 594.22 5 2017…
Q: Stock W has the following returns for various states of the economy: State of the Economy…
A: Expected Return and Standard deviation of the Stock is determined using the below formula: Expected…
Q: Returns State of Economy Prob J K Recession 0.25 -0.02 0.034 Normal 0.6 0.138 0.062…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Expected return A stock's returns have the following distribution: Demand for the Company's…
A: Formulas:
Q: What is the standard deviation of the returns on a stock given the following information? State…
A: Let's first calculate the expected return (Re). Let Pn and Rn be the probability and return for…
Q: Consider the following information: Rate of Return if State Occurs Probability of State of Economy…
A: As per the Bartleby guidelines, experts can attempt only 1 question if two unrelated questions are…
Q: Magee Inc.'s manager believes that economic conditions during the next year will be strong, normal,…
A: Excel Spreadsheet: Excel Workings:
Q: Stock W has the following returns for various states of the economy: State of the Economy…
A: State of the Economy Probability Stock W's Return Recession 0.15 -10% Below Average 0.2 5%…
Q: Compute standard deviation for this stock.
A: Given:- State of Economy Probability Expected Return Recession 10% -30% Below Average 20%…
Q: wo stock prices for six days are given below. Price A Price B 25 55 27 59 30 64 28 62 26 58…
A: The standard deviation is a tool that helps to measure the variation between the average data and…
Q: Owens & Minor (OMI) stock has an expected return of 14 percent. Its standard deviation is 36…
A: The question is to find an interest return and dirty price of a bond. The dirty price is calculated…
Q: What is the standard deviation of the returns on a stock given the following information? State of…
A: Given data is - State of Economy Probability of state of economy Returns Recession 0.05 6%…
Q: XYZ stock's returns will have the following probability distribution during the possible states of…
A: Expected Return = sum of (probability * return) Variance = sum of (Probability*(Mean-Return)^2)…
Q: Demand for the Company’s Products Probability of This Demand Occurring Rate of Return If This Demand…
A: Expected return is calculated by sum product of probability and return on that probability. Expected…
Q: Monthly Excess return for Stock 1 Market returns Monthly Excess 0.09 0.03 -0.07 0.01 0.02 0.02…
A: Beta is the value used to denote riskiness of a security with the market level of returns. It is…
Q: tock W has the following returns for various states of the economy: State of the Economy…
A: Stock W return = (Probability 1 * Return 1) + (Probability 2* Return 2) + ....+ (Probability N *…
Q: Expected Return, Variance, Std. Deviation and Cofficient of Variation: Magee Inc.'s manager believes…
A: A statistical measure that represents the variation in the return on the stock is term as the…
Q: Calculate the standard deviation of returns of Stock Q, given the following information.…
A: Given: State Stock return Probability(P) Recession -5% 25% Normal 10% 50% Boom 25% 25%
Q: tate probability Return on A RETURN ON B POOR 40% -0.06 -0.09 NORMAL 35% 0.16 0.14 GOOD 25% 0.2 0.3…
A: The expected return of a stock is the minimum rate of return that an investor expects from his…
Q: Intro You've estimated the following expected returns for a stock, depending on the strength of the…
A: As per the given information: StateProbabilityExpected…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- The standard deviation of stock returns for Stock A is 40%. The standard deviation of the market return is 20%. If the correlation between Stock A and the market is 0.70, then what is Stock A’s beta?Stock W has the following returns for various states of the economy: State of the Economy Probability Stock W's Return Recession 0.15 -10% Below Average 0.20 5% Average 0.30 8% Above Average 0.25 12% Boom 0.10 18% Stock W's standard coefficient of variance (CV) is Stock W’s Sharpe ratio assuming the risk-free is 1.25%Consider the following information: State of Probability of Economy State of Economy .17 .43 .33 .07 Boon Good Poor Bast Stock A a. Expected return b. Variance c. Standard deviation 11.70% 0.00120 3.40 .352 Answer is complete but not entirely correct. 122 012 -.112 % Rate of Return if State Occurs Stock B a. Your portfolio is Invested 32 percent each in A and C and 36 percent in B. What is the expected return of the portfolio? Note: Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the variance of this portfolio? Note: Do not round Intermediate calculations and round your answer to 5 decimal places, e.g., .16161. c. What is the standard deviation of this portfolio? Note: Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. .452 .102 .022 -.252 Stock C .332 .172 -.052 -.092
- 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. Year 1 2 3 4 Return (%) Year1: -4.1% Year2: 27.6% Year 3: 12.3% Year 4: 3.6%Consider the two (excess return) index model regression results for A and B: RA = 0.8% + 1RM R-square = 0.588 Residual standard deviation = 10.8% RB = –1.2% + 0.7RM R-square = 0.452 Residual standard deviation = 9% a. Which stock has more firm-specific risk? A. Stock A B. Stock B Which stock has greater market risk? A. Stock A B. Stock B b. For which stock does market movement has a greater fraction of return variability? A. Stock A B. Stock B c. If rf were constant at 4.5% and the regression had been run using total rather than excess returns, what would have been the regression intercept for stock A? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)Stock W has the following returns for various states of the economy: State of the Economy Probability Stock W's Return Recession 0.15 -10% Below Average 0.20 5% Average 0.30 8% Above Average 0.25 12% Boom 0.10 18% Stock W's standard coefficient of variance (CV) is
- Expected Returns: Discrete Distribution The market and Stock J have the following probability distributions: Probability rM rJ 0.3 15% 20% 0.4 9 7 0.3 18 10 Calculate the expected rates of return for the market and Stock J. Round your answers to one decimal place. Expected rate of return (Market): % Expected rate of return (Stock J): % Calculate the standard deviations for the market and Stock J. Do not round intermediate calculations. Round your answers to two decimal places. Standard deviation (Market): % Standard deviation (Stock J): %Consider the two (excess return) index model regression results for A and B. RA = 1.5% + 1.7RM R-square = 0.622 Residual standard deviation = 12% RB = -2.4 % +1.3RM R-square=0.468 Residual standard deviation = 9.8% Required: a. Which stock has more firm-specific risk? b. Which stock has greater market risk? c. For which stock does market movement explain a greater fraction of return variability? d. If rf were constant at 5.5% and the regression had been run using total rather than excess returns, what would have been the regression intercept for stock A? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D If rf were constant at 5.5% and the regression had been run using total rather than excess returns, what would have been the regression intercept for stock A? Note: Negative value should be indicated by a minus sign. Round your answer to 2 decimal places. Intercept %Suppose that the index model for stocks A and B is estimated from excess returns with the following results:RA = 3% + .7RM + eARB = −2% + 1.2RM + eBσM = 20%; R-squareA = .20; R-squareB = .12Break down the variance of each stock into its systematic and firm-specific components.
- Stock A has the following returns over the past periods. Calculate the downside risk measured by semi-variance? (answer with 4 decimal spaces) 0.0057 -0.0255 0.0621 -0.0879 -0.0983 0.0813 0.0356 -0.0015 -0.0307 0.0427 0.0297 0.0192III. 1. The average variance of financial assets on a market is 0.4% and the average covariance between assets is 0.1%. Compute the variance of a portfolio composed of a. 5 assets: b. 100 assets. a. V(Rpf)=.. b. V(Rpf)=.. 2. On a market at equilibrium the effcient frontier has the following equation: E(Rp)=4%+1.2 opf The standard deviation of the market portfolio equals 5%. a. The expected return on a portfolio A with a beta of 1,2 equals .%. b. How much of the total risk of portfolio B is explained by the market if the correlation between A and B equals 0,5? Answer: R? =. %Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA= 4.0% + 0.50RM + eA RB= -1.2% + 0.7RM + eB sigmaM= 17% ; R-squareA = 0.26 ; R-squareB= 0.18 Break down the variance of each stock to the systematic and firm-specific components (write in decimal form, rounded to 4 decimal places). Risk for A Risk for B Systematic Firm-specific