the risks inherent in stock returns in a portfolio of shares using the concepts of standard deviation and diversification
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A: Here AS PER POLICY I HAVE CALCULATED FIRST MAIN QUESTION ONLY PLZ REPOST FOR REMAINING
the risks inherent in stock returns in a portfolio of shares using the concepts of standard deviation and diversification
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- What is the standard deviation of the following investment: Actual Return Probability 5% 40% 45% 10% -12% -5% 15% 20% ○ 4.6% 12.8% 11.0% 9.2%You've observed the following returns on Mary Ann Data Corporation's stock over the past five years: 38.50 percent, 20.50 percent, 23.50 percent, -25.50 percent, and 12.50 percent. a. What was the arithmetic average return on Mary Ann's stock over this five-year period? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Arithmetic average return b-1. What was the variance of Mary Ann's returns over this period? (Do not round intermediate calculations. Round the final answer to 6 decimal places.) Variance b-2. What was the standard deviation? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Standard deviation %The figure in the popup window, shows the one-year return distribution for RCS stock. Calculate: a. The expected return. b. The standard deviation of the return. Note: Make sure to round all intermediate calculations to at least five decimal places.
- Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 6.6 percent and the standard deviation was 16.5 percent. a. What is the probability that your return on this asset will be less than -8.5 percent in a given year? Use the NORMDIST function in Excel® to answer this question. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What range of returns would you expect to see 95 percent of the time? Note: Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. c. What range of returns would you expect to see 99 percent of the time? Note: Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and…Suppose your expectations regarding the stock price are as detailed in the table below. Compute the mean and standard deviation of the holding period returns on stocks. State of the Market Probability Ending Price HPR (including dividends)Boom 0.23 $140 52.0%Normal growth 0.24 $110 19.0% Recession 0.53 $80 −11.5%Suppose the returns of a particular group of mutual funds are normally distributed with a mean of 9.5% and a standard deviation of 5.1%. If the manager of a particular fund wants to be sure that his fund is NOT in the bottom 25% of funds with the lowest return, what return must his fund have? (please round your answer to 2 decimal places)
- Suppose the returns on a particular asset are normally distributed. Also suppose the asset had an average return of 12.1% and a standard deviation of 26.6%. Use the NORMDIST function in Excel to determine the probability that in any given year you will lose money by investing in this asset. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.): Probability 32.46 %5. The changes in the values of two investment portfolios are modelled as Normal distributions. From day to day, the first investment portfolio changes in value with mean 2.6% and standard deviation 1.8%. From day to day, the second investment portfolio changes in value with mean 2.2% and standard deviation 2.5%. An investor is hoping for growth of at least 4%. Which portfolio is most likely to give growth of 4%?Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 7.3 percent and the standard deviation was 8.4 percent. a. What is the probability that your return on this asset will be less than -4.5 percent in a given year? Use the NORMDIST function in Excel® to answer this question. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What range of returns would you expect to see 95 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c. What range of returns would you expect to see 99 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your…
- Business Weekly conducted a survey of graduates from 30 top MBA programs. On the basis of the survey, assume the mean annual salary for graduates 10 years after graduation is 174000 dollars. Assume the standard deviation is 43000 dollars. Suppose you take a simple random sample of 70 graduates. Find the probability that a single randomly selected policy has a mean value between 175541.8 and 188390.6 dollars. P(175541.8 < X < 188390.6) = (Enter your answers as numbers accurate to 4 decimal places.) Find the probability that a random sample of size n = 70 has a mean value between 175541.8 and 188390.6 dollars. P(175541.8< M < 188390.6) = Submit Question L a (Enter your answers as numbers accurate to 4 decimal places.) 9 hpSuppose the returns of a particular group of mutual funds are normally distributed with a mean of 9.9% and a standard deviation of 3.7%. If the manager of a particular fund wants his fund to be in the top 10% of funds with the highest return, what return must his fund have?Below are data on economic condition, probability, and expected return on stock and bond funds in a year. Scenario Probability Stock Fund (%) Bond Fund (%) Severe recession 0.05 -37 -10 Mild recession 0.25 -11 10 Normal growth 0.40 14 7 Boom 0.30 30 2 Calculate expected return and standard deviation of each fund. Calculate covariance and correlation coefficient between stock fund and bond fund. Your portfolio is composed of 85% in bond fund and 15% in stock fund. Using Excel, calculate expected return and standard deviation of your portfolio based on Equations in the attached images. Discuss important implications with respect to portfolio theory as you evaluate all numbers in part a, b, and c above.
