You decide to invest in a portfolio consisting of 27 percent Stock A, 38 percent Stock B, andthe remainder in Stock C. Based on the following information, what is the variance of yourportfolio?State of EconomyRecessionNormalProbability ofState of Economy0.1050.647Return if State OccursStock A Stock B Stock C-2.60%10.48%21.37% 24.75% 29.45%-9.20%8.50%-11.60%16.00%Boom0.2480.007780.00837€30.011300.008790.00946

Answered: Image /qna-images/answer/163c5c62-02a2-4e51-a43d-50173e482445.jpg

Answered: You decide to invest in a portfolio…

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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Given the returns and probabilities for the three possible states listed below, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 7.55 percent and 10.80 percent. respectively. (Round answer to 4 decimal places, e.g. 0.0768.) Good OK Poor Covariance Probability 0.21 0.60 0.19 Return on Stock A 0.30 0.10 -0.25 Return on Stock B 0.50 0.10 -0.30
Provide each answer with three decimal places of precision. What is the weighted probability of zero days of filming? What is the weighted probability of one day of filming? What is the weighted probability of two days of filming? What is the weighted probability of three days of filming? What is the weighted probability of four days of filming? What is the weighted probability of five days of filming? What is the variance?
A consultant has been hired to redesign a company's production facility. The consultant estimates the probabilities of her potential profit as shown in the table below. What is her profit expectation? $ Profit/Loss $40,000 $30,000 $20,000 $10,000 $5,000 Probability 0.06 0.20 0.38 0.30 0.06
The figure below shows survival probabilities from all-cause mortality over 20 years in participants over 50 years of age who have normal glucose, glucose intolerance, and Type II diabetes mellitus. Estimate the 5-year survival probability for Type II diabetes. a. approximately 10% b. approximately 60% c. approximately 76% d. approximately 84%
The number of people entering a security check-in lineup in a 15-minute interval at a medium sized airport can be modeled by the following probability model: e-30.5 (20.6)* P(X= x) = Part (a) What does 20.6 represent in the probability model? Select the most appropriate explanation below. A. 20.6 is the rate at which people enter the security check-in lineup every 15 minutes. B. 20.6 represents how much skewed the distribution of values is. x = 0, 1, 2, ... C. 20.6 represents the average number of people who enter the a security check-in lineup every 15-minutes. D. 20.6 represents a weighted-average of the number of people who enter the a security check-in lineup every 15-minutes. OE. 20.6 is the standard deviation of the distribution of people entering the security check-in lineup every 15-minutes. P(X= 15) = Par Part (b) Compute the probability that 15 people enter the security check-in lineup in a 15-minute interval. Use four decimals in your answer. 1 (use four decimals in your…
You are given the following probability distribution for the returns on Security A and Security B: Probability 0.3 0.3 0.3 0.1 Return on Security A 37% 7% 20% -15% Return on Security B 13% 19% 26% -22% Assume you invest $4,000 in Security A and $6,000 in Security B. What are the expected return and standard deviation of your portfolio?
A consultant has been hired to redesign a company's production facility. The consultant estimates the probabilities of her potential profit as shown in the table below. What is her profit expectation? Profit/Loss Probability $40,000 $30,000 $20,000 $10,000 $5,000 0.08 0.30 0.38 0.20 0.04
Shack Homebuilders Limited is evaluating a new promotional campaign that could increase home sales. Possible outcomes and probabilities of the outcomes are shown next. Possible Outcomes Ineffective campaign Normal response Extremely effective Additional Sales in Units Coefficient of variation 50 70 130 Probabilities 0.10 0.20 0.70 Compute the coefficient of variation. Note: Do not round intermediate calculations. Round your answer to 3 decimal places.
You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the accompanying table. Project A B C D Multiple Choice The variance in the returns of project A is O 1,600. 900. 225. Boom (50%) $20 -$10 $ 30 $ 50 O. Recession (50%) - $ 10 $ 20 -$ 30 -$50
Determine whether the following are valid probability models or not. Type "VALID" if it is valid, or type "INVALID" if it is not.

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