The expected rate of return of an investment ________. a. equals one of the possible rates of return for that investment b. equals the required rate of return for the investment c. is the mean value of the probability distribution of possible returns d. is the median value of the probability distribution of possible returns e. is the mode value of the probability distribution of possible returns

Q: The best investment ____________________. Select one or more: a. maximizes reward b. maximizes…

A: The best investment depends on an individual's investment goals, risk tolerance, and financial…

Q: urrent assets of NorthPole.com at 1.7 million, 3rd quarter $1.5 million ermanent current assets is:…

A: Current assets are those assets which can be used to pay for current laibilties that means short…

Q: The expected return for an individual asset is the sum of expected returns in each state of the…

A: Expected rate of return is the most likely and probable and average rate of return that can be…

Q: What is the formula to find an expected in returns in CAPM

A: In this question, we are required to determine the formula for expected return in Capital Asset…

Q: Use the following information to answer the questions.       State of   Economy Probability of State…

A: Given : State of Economy Probability Return on Asset D Return on Asset E Return on Asset F Boom…

Q: What is the expected return on a two asset portfolio and what are its variance and standard…

A: Two Asset portfolio: The portfolio that has 2 assets is called as two asset portfolio.

Q: A measure of how the returns of two risky assets move in relation to each other is the:

A: By calculating covariance we can identify in what direction the returns move for two securities.

Q: The expected value, standard deviation of returns, and coefficient below.) Asset A Possible Outcomes…

A: Expected return-The expected return is calculated by multiplying the probability of each possible…

Q: The desired rate of return on an investment should reflect the degree of risk involved. A.   True…

A: Riskier investments may give higher returns to the investors as they provide favorable ratio of risk…

Q: The Capital Asset Pricing Model (CAPM) asserts that an asset’s expected return is equal to the…

A: Based on CAPM, Expected return on security = Risk free rate + Beta * Market risk premium

Q: Discuss the difference between a price-weighted index and a value-weighted index. Give one example…

A: "Hi, Thanks for the Question. Since you asked multiple question, we will answer first question for…

Q: Another name for the expected value of an investment would be: a. The mean value b. The risk-free…

A: The expected value (EV) is an anticipated value for investment at some point in the future. In…

Q: The VIX measures Select one: a.Realized volatility B. Current volatility C. Historical volatility D.…

A: The VIX stands for volatility index. Volatility index was the first benchmark which was created by…

Q: Match each term with the best definition or descriptor. NPV is __________ ( a unitless ratio, a…

A: Solution:- Net Present Value (NPV) means the net present value of cash inflows after the deduction…

Q: Expected return and standard deviation a.  What is the expected return of asset​ b?

A: The expected return is the return that an investor expects on its investment under various…

Q: True or false. to apply the rate of return analysis correctly, we need to classify an investment i…

A: In the given question we need to answer whether the given statement is True or False.

Q: Given the capital allocation line, an investor's optimal complete portfolio is the portfolio that A)…

A: Capital Allocation Line (or CAL) refers to that line in finance that shows risk and reward profile…

Q: Explain Payment Caps and Negative Amortization?

A: Payment Caps: A payment cap is a customer protection that bounds the amount that your monthly…

Q: When the forward rate is equal to the expected future spot rate, the forward rate is said to be…

A: Forward contract are settled in the future times and related to spot rate and they derive value from…

Q: Which of the following correctly orders the investment rules of average accounting return (AR),…

A: Capital budgeting is method of selecting projects among available projects so as to increase value…

Q: Which one of the following is most closely related to the net present value profile? A: Payback B:…

A: The net present value method is used to evaluate the investment projects. We can evaluate the…

Q: Normal probability distribution    Assuming that the rates of return associated with a given asset…

A:

Q: The the expected return, the the risk. O a. lower; higher O b. higher,lower O c. higher; higher more…

A: Expected return and risk are correlated

Q: Suppose the gain from an investment is a normal random variable with mean 2 and standard deviation…

A: VaR=mean-Z*standard deviationLets suppose probability of value at risk is 1%Z score at 99% = 2.326

Q: Beta is which of the following: A) standard deviation. B) total risk. C) Beta is the relationship…

A: option C is correct  Beta is the relationship which is between an investment's return, and the…

Q: Define each of the following terms: c. Net present value (NPV) method; internal rate of return (IRR)…

A: Net present value (NPV) is the contrast between the present value of money inflows over some…

Q: Consider two assets. Suppose that the return on asset 1 has expected value 0.05 and standard…

A: Portfolio refers to basket of different financial assets in which investment is made by single…

Q: The standard deviation of return on investment a is 0.10, while the standard deviation of return on…

A: It is a case of calculation of covariance when the data of standard deviation and correlation…