What is the standard deviation of the following investment:Actual Return Probability5%40%45%10%-12%-5%15%20%○ 4.6%12.8%11.0%9.2%

Let X be the Actual return.Given,XP(X)-12%5%-5%40%15%45%20%10%

Answered: What is the standard deviation of the…

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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O If p(A) = 0.17, p(B) = 0.06 and p(A and B) = 0.0102, are A and B independent? %3D
Which investment has the highest expected return? Which is the safest investment and why? Which is the riskiest investment and why? A. x P(x) xP(x) 7000000 0.2 1400000 0 0.3 0 -1000000 0.5 -500000 Total 900000 b. x P(x) xP(x) 3000000 0.10 3000000 2000000 0.60 1200000 -1000000 0.30 -300000 Total 1200000 c. x P(x) xP(x) 3000000 0.40 1200000 0 0.50 0 -1000000 0.10 -100000 Total 1100000
Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period: Year Large-Company US Treasury Bill 1 3.97 6.59 2 14.34 4.42 3 19.23 4.29 4 −14.45 7.32 5 −31.94 5.28 6 37.47 5.38 a. Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the arithmetic average risk premium over this period? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer…
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The accompanying data represent the annual rates of return of two companies' stock for the past 12 years. Complete parts (a) through (k). O A. OB. 0.50- 0.50- 0.00- 0.00- -0.50- -0.50- -0.3 RR of Company 2 0.0 0.3 -0.3 0.0 0.3 RR of Company 1 OC. 0.30- 0.50- 0.00- 0.00- -0.30- -0.50- o.0 0'5 0.0 0.3 -0.5 RR of Company 2 0.5 -0.3 RR of Company 1 (b) Determine the correlation coefficient between rate of return of Company 1 and Company 2. The correlation coefficient is 0.966. (Round to three decimal places as needed.) (c) Based on the scatter diagram and correlation coefficient, is there a linear relation between rate of return of Company 1 and Company 2? Yes No (d) Find the least-squares regression line treating the rate of return of Company 1 as the explanatory variable. y=x+O (Round to four decimal places as needed.) RR of Company 1 RR of Company 1 RR of Company 2 RR of Company 2
From the data in the table it shows the 2019 daily return data for the S&P 500 Index (stocks) and the US 30 year Bond (bonds). How do I test the hypothesis that mean daily return on stocks exceeds the mean daily return on bonds? Please show the steps. S&P500 dailt returns data: Date Price Daily Return 2019-12-31 3230.78 0.294602% 2019-12-30 3221.29 -0.578082% 2019-12-27 3240.02 0.003398% 2019-12-26 3239.91 0.512817% 2019-12-24 3223.38 -0.019545% 2019-12-23 3224.01 0.086614% 2019-12-20 3221.22 0.494478% 2019-12-19 3205.37 0.445929% 2019-12-18 3191.14 -0.043230% 2019-12-17 3192.52 0.033529% US 30 Year Bond Date Price Daily Return 31-Dec-19 2.389 2.32% 30-Dec-19 2.335 0.78% 29-Dec-19 2.317 -0.03% 27-Dec-19 2.318 -0.16% 26-Dec-19 2.321 -0.71% 25-Dec-19 2.338 0.15% 24-Dec-19 2.334 -0.83% 23-Dec-19 2.354 0.31% 22-Dec-19 2.346 0.12% 20-Dec-19 2.344 -0.43%
Create embedded formulae which generate statistical properties of the portfolio upon insertion of the weights. Observe the mean, the standard deviation, and the CV of the annual rate of return of the portfolio. Disney Historical Annual Stock Price Data Year Average Stock Price Year Open Year High Year Low Year Close Annual % Change 2021 180.3683 177.6800 201.9100 163.0300 171.1800 -5.52% 2020 126.4019 148.2000 181.1800 85.7600 181.1800 25.27% 2019 130.7728 108.9700 151.6400 106.3300 144.6300 31.90% 2018 108.3752 111.8000 118.9000 98.5400 109.6500 1.99% 2017 106.3582 106.0800 115.8400 96.9300 107.5100 3.16% 2016 97.4618 102.9800 106.6000 88.8500 104.2200 -0.82% 2015 107.8355 93.7500 121.6900 90.9600 105.0800 11.56% 2014 84.4812 76.2700 95.5000 69.9900 94.1900 23.29% 2013 62.8879 51.1000 76.4000 50.5800…
Q3. Suppose that the market default rate for bonds is given by 0.01, i.e., the probability the market believes that the company may not be able to pay the owner of the bonds is 0.01. Now a credit default swap (CDS) is sold at fair price $ 0.01 per unit. Ackman expects that the true default rate is 0.05, not 0.01. Ackman bought 67 billion units of CDS at the price $ 0.01 per unit. a. Suppose that Ackeman's expectation about the default rate is not correct. I.e., the true default rate for bonds is given by 0.01. Find the cost of the purchase. Find the expected payoff. Find the profit. b. Suppose that Ackeman's expectation is correct. Find the cost of the purchase. Find the expected payoff. Find the profit.
FARM POPULATION Consider the percent of the United States population which lived on farms during the years 1880-1990. Year Percent 1880 43.8% 1890 42.3% 1900 41.9% 1910 34.9% 1920 3.1% 1930 24.9% 1940 23.2% 1950 15.3% 1960 8.7% 1970 4.8% 1980 2.7% 1990 1.9% 1. Using technology, calculate the average rate of change per year. You may, for example, make a table in a spreadsheet with Year, Percent of Population, and Average Rate of Change, as three columns. What are the independent and independent variables? 2. Using technology, create a plot of Percentage vs Year. Does the data appear to be linear? Explain. 3. Using technology, construct a linear trendline and determine the R2 value. What is the trendline equation? What is the slope, including units? What is the R2 value? Is there a strong or weak correlation? 4. Using the trendline formula, calculate algebraically the date when 100% of the population lived on a farm? Explain in the context of the problem. 5. Using the trendline…
A company estimates that 0.1% of their product will fail after th original warranty period but within 2 years of the purchase, with a replacement cost of $350. If they offer a 2 year warranty for $18 , what is the company's expected value of each warranty sold?
Customer interarrival times at a store are exponentially distributed with rate 8 customers per hour. Customers are served by a single customer service representative (CSR), with an average service time of 5 minutes. Service times are also exponentially distributed. Which of the following statements are true? (Please tell me why option B is the right option) A. The average time spent waiting for the CSR is 15 minutes. B. The store is busy (has customers) 33% of the time C. The probability of having one or more customer in the store is 0.222. D. None of the answers are correct. E. The average number of customers in the store is 2.0.

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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%