te of the economy Probability T-Bills Phillips Pay -up Rubber-made Market Index Recession 0.2 7 -22 28 10 -13 Below Average 0.1 7 -2 14.7 -10 1 Average 0.3 7 20 0 7 15 Above Average 0.3 7 35 -10 45 29 Boom 0.1 7 50 -20 30 43 Mean 7 16.9 2.07
te of the economy Probability T-Bills Phillips Pay -up Rubber-made Market Index Recession 0.2 7 -22 28 10 -13 Below Average 0.1 7 -2 14.7 -10 1 Average 0.3 7 20 0 7 15 Above Average 0.3 7 35 -10 45 29 Boom 0.1 7 50 -20 30 43 Mean 7 16.9 2.07
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
Related questions
Question
% Return on T-Bills, Stocks and Market Index |
||||||
State of the economy |
Probability |
T-Bills |
Phillips |
Pay -up |
Rubber-made |
Market Index |
Recession |
0.2 |
7 |
-22 |
28 |
10 |
-13 |
Below Average |
0.1 |
7 |
-2 |
14.7 |
-10 |
1 |
Average |
0.3 |
7 |
20 |
0 |
7 |
15 |
Above Average |
0.3 |
7 |
35 |
-10 |
45 |
29 |
Boom |
0.1 |
7 |
50 |
-20 |
30 |
43 |
Mean |
7 |
16.9 |
2.07 |
19.60 |
15 |
|
Standard Deviation |
0 |
23.4 |
15.62 |
18.92 |
17.71 |
|
Coefficient of Variation |
0 |
1.39 |
7.55 |
0.97 |
1.18 |
|
Covariance with MP |
0 |
0.04 |
-0.3 |
0.02 |
0.03 |
|
Correlation with Market Index |
0 |
1 |
-1.0 |
0.69 |
1 |
|
Beta |
0 |
1.32 |
-0.88 |
0.74 |
1 |
|
|
7 |
17.54 |
-0.02 |
12.89 |
15.0 |
|
Valuation (Overvalued/Undervalued/Fairly valued) |
||||||
Nature of stock |
Defensive |
Aggressive |
Defensive |
Defensive |
Defensive |
Showing all working complete the table showing valuation
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education