What proportion of each stock’s risk was market risk, and what proportion was specific risk? What is the variance of the returns for Sun Life Financial stock? What is the specific variance? What is the confidence interval on Suncor’s beta?

Q: what is the return of stock a what is the return of stockb what is the standard deviation on stock…

A: Given: tate Probability(P) Return A Return B Poor 40% -0.08 -0.15 Normal 35% 0.19 0.14 Good…

Q: The table summarizes the annual mean returns, variances and standard deviations using the monthly…

A: Coefficient of Variation is calculated by using following formula:-Coefficient of Variation =…

Q: Stock A has an expected return of 18% and a standard deviation of 38%. Stock B has an expected…

A: The Sharpe ratio is calculated as follows:   Subtract the risk-free rate from the return…

Q: a) Calculate the main statistic measures to explain the relationship between stock A and the market…

A: Covariance determines the direction of relationship between two variables. Here the two variables…

Q: 1. Based on the following information, what is standard deviation for the stock? Please answer with…

A: Variance = {(Expected return - Given return)2 * Probability+ (Expected return - Given return)2  *…

Q: 1. You are given the following information regarding prices for a sample of stocks. PRICE Stock…

A: Hi, as per our policy we will answer the first 3 sub-parts. Please repost the remaining parts…

Q: If the correlation between stock ABC Ltd and market is 0.5, standard deviation on market portfolio…

A: Correlation between stock and market (r) = 0.5 Standard deviation on market portfolio (sdM) = 25…

Q: Based on the following information, what is the diversifiable proportion for the stock? Standard…

A: Stock's standard deviation: 0.5Standard deviation of the index: 0.1Correlation: 0.6

Q: Consider the following stocks. Stock Expected return Std. Deviation Beta A 15.9% 27.8% 0.93…

A: Sharpe ratio = (Expected return - Risk free rate of return) / Standard deviation

Q: Suppose that the index model for stocks A and B is estimated from excess returns with the following…

A: ParticularsStock AStock BBeta0.700.90R-square0.200.15σM22%

Q: Suppose that the index model for stocks A and B is estimated from excess returns with the following…

A: Standard deviation of stock = wherei is stock is beta of stock i is standard deviation of market

Q: What is the covariance and the correlation coefficient between HD and ML? xx

A: Given standard deviation of market index σM =0.15 Therefore, the variance of market index is σM2 =…

Q: The index model has been estimated for stocks A and B with the following results: RA= 0.12 +0.630RM+…

A: The returns of the stocks are expressed in terms of alpha and beta. We have to use the covariane…

Q: Estimate the return and standard deviation of the historical returns on Stock A that were: 15%, 20%,…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Consider two stocks, Stock D with an expected return of 21 percent and a standard deviation of 36…

A: Expected return of portfolio comprising of 2 stocks is computed as follows:-Rp =…

Q: Given the following information, determine the beta coefficient for Stock L that is consistent with…

A: According to capital asset pricing model Expected return on stock = Risk free rate+Beta×Market…

Q: You are conducting some statistical analyses on two securities: Stock X and Stock Y. You find that…

A: Volatility of stock X = 5.78%Volatility of stock Y = 7.94%Correlation = 0.25To find: The covariance…

Q: Given the following returns for Stock X and stock Y Stock X % return   Stock Y % return 2…

A: Calculate the variance and standard deviation as follows:

Q: 1 2 3 4 5 Stock A 0.11 0.07 0.14 -0.02 0.07 Stock B 0.06 0.01 0.04 0.02 -0.03 a. What are the…

A: Here, Year Stock A Stock B 1 0.11 0.06 2 0.07 0.01 3 0.14 0.04 4 -0.02 0.02 5 0.07…

Q: The correlation coefficient between stock B and the market portfolio is 0.8. The standard deviation…

A: In this question, we are required to determine the beta of the stock.

Q: The following table shows estimates of the risk of two well-known Canadian stocks:     Standard…

A: Given information of two-well known Canadian stocks: Standard deviation(%)R2BetaStandard beta error…

Q: The following factors were identified regarding Stock B. the stock sensitivity to each factor and…

A: Expected return on asset using multiple factor model is calculated as Expected return on asset = Rf…

Q: Using the data in the following table,, estimate the: a. Average return and volatility for each…

A: > Please refer to the spreadsheet below for calculation and answer. Cell reference is also…

Q: pllowing stocks and the PSEI. 2. AGI SM Year Stock Return x x (x--X)² Year Stock Return x x (X;-x)²…

A: Note: As per our guidelines, we can only answer one question at once. Please post other questions…

Q: Percentages need to be entered in decimal format, for instance 3% would be entered as .03. That is…

A: Note: Return of the stock is taken what was provided in the previous question. Please adjust the…

Q: Directions: Compute the total returns, the average of returns, and the standard deviation of the…

A: Data given: ERGH Inc., Year Stock Price (P) Jan-21 0.088 Feb-21 0.090 Mar-21 0.097…

Q: Suppose that the index model for two Canadian stocks HD and ML is estimated with the following…

A: From the 2 equations, beta of stock HD and ML can be determined

Q: Suppose that the index model for two Canadian stocks HD and ML is estimated with the following…

A: Systematic risk refers to the risk that the market or the industry faces as a whole and which is…

Q: From Previous Question G): >>>What is the beta? Explain with its formula. g) Use the…

A: Calculation of Expected Return, Standard Deviation and Covariance: Excel Spreadsheet:

Q: The resulting SML equation for Laternios is given by: Er Laternios + = X (E[rM] - rf)

A: Regression analysis on a stock provides insights into the relationship between the stock's returns…

Q: What is the correlation coefficient of the returns of the stock and the returns of the market?

A: Correlation: It is a measure of statistics used to show the degree of association between two…

Q: The index model has been estimated from the excess returns for stock A with the following results:…

A: RA12.00%+1.55Rm+eAσM24.00%σ(eA)18.50%

Q: 8. (Portfolio of two stocks) The following spreadsheet presents data for stocks A and B. A B C 1 2…

A: Step 1:The return of portfolio is the weighted average return of Stock A and Stock B. Standard…

Q: What is the average annual return? b. What is the variance of the stock's returns? c. What is the…

A: Standard deviation refers to the measurement of the dispersion of data from its mean value which…

Q: Stock A Stock B Market Standard Deviation Return Correlation Coefficient between A & M Correlation…

A: The Capital Asset Pricing Model(CAPM) refers to the relationship between expected return for assets…

Q: Suppose that the index model for stocks A and B is estimated from excess returns with the following…

A: The degree by which the stock returns will deviate or move along in the same direction as changes in…

Q: We know the following expected returns for stocks A and B, given the different states of the…

A: 1. Expected return is computed by following formula-Expected return = WhereRi = return of stockPi =…

Q: Consider the following information on Stocks I and II: State of Economy Probability of State of…

A: Standard deviation measures the dispersion relative to its mean, indicating volatility. Beta…

Q: Compute the abnormal rates of return for the following stocks assuming the following systematic risk…

A: Abnormal rate of return refers to the return that is earned by the stock which is greater than the…

Q: Stock M N O P Standard deviation 12% 20% 15% 30% 1. Which stock is the riskest?…

A: The relationship between the return and risk is direct. When risk of stock is more, return provided…

Q: Compute the abnormal rates of return for the following stocks assuming the following systematic risk…

A: StockRitBetaRmtB12.70%0.94.90%F10.10%1.28.30%T14.40%1.355.30%C10.10%0.715.0%E16.10%-0.3511.40%Requir…

Q: You are expected to assess the stand-alone risk of each of the stock using the Sharpe Ratio. The…

A: Sharpe Rario:- The excess return earned over the risk free return on portfolio to the portfolio’s…

Q: Which stock do you advise Ahmed to select according to the required rate of return? And explain why?

A: Beta is an estimate of risk prevailing in the market. When risk prevailing in the economy is…

Q: Stock A has a correlation with the market of 0.53. Assuming that the standard deviation of returns…

A: Given:Correlation coefficient (ρ) between Stock A and the market = 0.53The standard deviation of…

Q: ABC XYZ 11.40 11.40 b. Which stock has greater dispersion around the mean return? ABC .XYZ c.…

A: Arithmetic average is the simple mean and can be found as the sum of all and divided by total…

Q: (Expected rate of return and risk) Syntex, Inc. is considering an investment in one of two common…

A: Expected rate of return is the rate of return that the investors expect on their investment…

Q: The information regarding the risk level of three different stocks is presented below. 1. Which…

A: Higher beta is not desirable.

Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.