Use the following information on states of the economyand stock returns to calculate the expected return andthe standard deviation of returns. Assume that all threestates are equally likely. (Do not round intermediatecalculations. Enter your answers as a percent roundedto 2 decimal places.) State of Economy Security ReturnIf State Occurs Recession -8 % Normal 13 Boom 23

Given DataStates of the economy: Recession, Normal, BoomSecurity Returns:Recession: −8% Normal: 13%…

Answered: Use the following information on states…

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

See similar textbooks

Similar questions

Consider the following returns and states of the economy for TZ.Com.: Economy Probability Return Weak 40% 1% Normal 50% 8% Strong 10% 39% What is the standard deviation of TZ's returns? SET YOUR CALCULATOR TO FOUR DECIMAL PLACES AND ROUND TO 2 DECIMAL PLACES AT THE END. DO NOT ENTER THE %. FOR EXAMPLE, IF YOUR ANSWER IS 7.70% ENTER IT AS 7.70.
Consider the following information: State of Economy Recession Normal Boom Probability of State of Economy .22 .47 .31 Expected return Rate of Return if State Occurs -.11 .13 .32 Calculate the expected return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) %
Northern Wear stock has an expected return of 14.6 percent. Given the information below, what is the expected return on this stock if the economy is normal? Probability of State of Economy .15 State of Economy Rate of Return Recession Normal -05 .80 Воom .05 .19 O 13 percent O 16 percent 18 percent O 21 percent O 23 percent
Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone:
pm.3
You own a portfolio with the following expected returns given the various states of the economy. What is the overall portfolio expected return? State of Economy Boom Normal Recession 0.0701 O 0.0648 0,0719 O 0.0548 Expected returns in various states of the economy Probability 0.0442 23.00% 70.00% 7.00% 13.00% 7.00% -10.00% Rate of Return
Consider the following information: Probability of Rate of Return If State of Economy State of Economy State Occurs Recession Normal Boom .20 .45 .35 Expected return Calculate the expected return. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. -.14 .10 .36 %
Vijay
Please correct answer and don't use hend raiting
Consider the following information: Rate of Return. If State Occurs State of Economy Recession Normal Boom Probability of State of Economy 24 45 .31 -.09 11 30 Calculate the expected return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return %
Using the following information, calculate the expected return and the standard deviation of Metlock. (Round intermediate calculations to 4 decimal places, e.g. 15.2564 and the final answers to 2 decimal places, e.g. 15.25%.) State of the Metlock stock economy Probability return (%) Depression 0.10 -4.9 Recession 0.15 1.0 Normal 0.40 5.9 Boom 0.35 17.9 Expected return Standard deviation % di do %
State of Economy Bust Boom State of Economy Roll Bust Boom Ross Bust Boom Calculate the standard deviations for Roll and Ross by filling in the following table: (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 4 decimal places.) Probability of State of Economy Probability of State of Economy .50 .50 .50 .50 .50 .50 Return Deviation from Expected Return -0.1950 0.2000 Security Returns if State Occurs 0.0600 -0.0600 Roll -14% 25 Squared Return Deviation 0.0380 0.0380 0² = Ross (0.0036) 0.0036 0²= 18% 6 Product 19.5000 0.0600

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

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

SEE MORE TEXTBOOKS