The market risk premium is 5.0%, and the market's variance is 3%.The risk-free rate is 2.0%.Applying CAPM:• Asset A has an expected return of 15%●• Asset B has an expected return of 10%.What is the covariance between Asset A and B?O a. 12.48%O b. There is no enough information to determineO c.11.46%O d.9.08%O e. 10.05%

To calculate the covariance between Asset A and Asset B, we need to know the correlation coefficient…

Answered: The market risk premium is 5.0%, and…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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5.22 a. Form the probability distribution table for P(x) = , for x = 1,, 2, 3. %3D b. Find the extensions xP(x) and x²P(x) for each x. Find E[xP(x)] and E[x*P(x)]. d. Find the mean for P(x) = , for x = 1, 2, 3. 2 e. Find the variance for P(x) =, for x = 1, 2, 3. 6' f. Find the standard deviation for P(x) = *, for o 62 aluvilidsdon х%3D 1, 2, 3.
The following information relate to the two: Projects A and B of Augustina’s Co.Ltd. State of the Economy Probability Returns of A (%) Returns of B (%) Boom 0.4 20 9 Normal 0.3 15 12 Recession 0.3 10 18 1.Calculate the expected return and standard deviation of Projects A and B 2.If project A and B are combined in the ratio 6:4 , what is the expected return and standard deviation of the portfolio
D5)
6. For an insurance coverage, claim counts follow a binomial distribution with m = 4. q varies by insured with the following probabilities: 0.1 0.2 0.3 Probability 0.5 0.25 0.25 An insured submits 0 claims in the first year and 3 claims in the second year. Calculate the predictive probability of the same insured submitting 0 claims in the third year.
3. Draw the probability distribution of the function, find the mean, variance, and standard deviation of the profit in the instance below: A store has a monthly sale of P23,540, which deviates by P3,876. Now, the profit is calculated as 28% of the sales subtracted by the operating cost of P,5324.
Express House Delivery Service provides high quality service to customers. The company guarantees a refund of all charges if a package it is delivering does not arrive at its destination by the specified time. It is known from past data that despite all efforts, 2% of the packages mailed through this company do not arrive at their destinations within the specified time. Suppose a corporation mails 10 packages through Express House Delivery Service on a certain day.
Suppose a realtor wants to determine the current percentage of customers who have a family of five or more. How many customers should the realtor survey in order to be 98% confident that the estimated (sample) proportion is within 2 percentage points of the true population proportion of customers who have a family of five or more? z0.10 z0.05 z0.025 z0.01 z0.005 1.282 1.645 1.960 2.326 2.576 Use the table of values above.
Q.6. Use the binomial distribution in which n 6 and p = 0.3 to %3D calculate the following probabilities: (a). X is at most 1. (b). X is at least 2. (c). X is more than 5. (d). X is less than 6.
Again recall Table 8a from the working paper "The Market for Financial Advisor Misconduct" discussed in Lecture 7 and HW 7. For your convenience, the table is reproduced below. Table 8a. Consequences of Misconduct: Industry and Firm Discipline No Misconduct Misconduct Remain with the Firm 81.29% 51.99% Leave the Firm 18.71% 48.01% Leave the Industry 8.92% 26.96% Join a Different Firm (within 1 year) 21.05% 9.79% Note: Table 8a displays the average annual job turnover among financial advisers over the period 2005-2015. The table shows, on average, the percentage of advisers that remain with their firm, leave the industry (for at least one year) or join a new firm (within a year). The job transitions are broken down by whether or not the advisor was disciplined for misconduct in the previous year. Consider randomly selecting five financial advisors who were disciplined for misconduct in the previous year. What is the chance that at least one of them leaves the firm? (Answer as a…
3
Consider the rate of return of stocks ABC and XYZ. Year 1 2 SAWN T 3 4 5 FABC 24% 10 17 4 1 ABC XYZ a. Calculate the arithmetic average return on these stocks over the sample period. (Round your answers to 2 decimal places.) rxyz 34% 12 18 1 -9 Arithmetic Average ABC XYZ % % b. Which stock has greater dispersion around the mean return?
5

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