Standard deviation of returns. Introduction: The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.

Question

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Answer 1

Question

Chapter 8, Problem 8.12P

a)

Summary Introduction

To discuss:

Standard deviation of returns.

Introduction:

The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.

b)

Summary Introduction

To discuss:

Expected range of return outcomes.

Introduction:

Return: In financial context, return is seen as percentage that represents the profit in an investment.

c)

Summary Introduction

To determine:

Probability distribution.

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Assuming that the rates of return associated with a given asset investment are normally distributed; that the expected return, r, is 18.7%; and that the coefficient of variation, CV, is 1.88, answer the following questions: a. Find the standard deviation of returns, sigma Subscript rσr. b. Calculate the range of expected return outcomes associated with the following probabilities of occurrence: (1) 68%, (2) 95%, (3) 99%.

Answer 2

Question

Chapter 8, Problem 8.12P

a)

Summary Introduction

To discuss:

Standard deviation of returns.

Introduction:

The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.

b)

Summary Introduction

To discuss:

Expected range of return outcomes.

Introduction:

Return: In financial context, return is seen as percentage that represents the profit in an investment.

c)

Summary Introduction

To determine:

Probability distribution.

Expert Solution & Answer

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Answer 3

Question

Chapter 8, Problem 8.12P

a)

Summary Introduction

To discuss:

Standard deviation of returns.

Introduction:

The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.

b)

Summary Introduction

To discuss:

Expected range of return outcomes.

Introduction:

Return: In financial context, return is seen as percentage that represents the profit in an investment.

c)

Summary Introduction

To determine:

Probability distribution.

Expert Solution & Answer

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Answer 4

Question

Chapter 8, Problem 8.12P

a)

Summary Introduction

To discuss:

Standard deviation of returns.

Introduction:

The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.

b)

Summary Introduction

To discuss:

Expected range of return outcomes.

Introduction:

Return: In financial context, return is seen as percentage that represents the profit in an investment.

c)

Summary Introduction

To determine:

Probability distribution.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 8, Problem 8.12P

a)

Summary Introduction

To discuss:

Standard deviation of returns.

Introduction:

The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.

b)

Summary Introduction

To discuss:

Expected range of return outcomes.

Introduction:

Return: In financial context, return is seen as percentage that represents the profit in an investment.

c)

Summary Introduction

To determine:

Probability distribution.

Answer 6

Chapter 8, Problem 8.12P

a)

Summary Introduction

To discuss:

Standard deviation of returns.

Introduction:

The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.

Answer 7

Chapter 8, Problem 8.12P

a)

Summary Introduction

To discuss:

Standard deviation of returns.

Introduction:

The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.

Answer 8

b)

Summary Introduction

To discuss:

Expected range of return outcomes.

Introduction:

Return: In financial context, return is seen as percentage that represents the profit in an investment.

Answer 9

b)

Summary Introduction

To discuss:

Expected range of return outcomes.

Introduction:

Return: In financial context, return is seen as percentage that represents the profit in an investment.

Answer 10

c)

Summary Introduction

To determine:

Probability distribution.

Answer 11

c)

Summary Introduction

To determine:

Probability distribution.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 8.1 - What is risk in the context of financial decision...Ch. 8.1 - Prob. 8.2RQ Ch. 8.1 - Compare the following risk preferences: (a) risk...Ch. 8.2 - Explain how the range is used in scenario...Ch. 8.2 - Prob. 8.5RQ Ch. 8.2 - Prob. 8.6RQ Ch. 8.2 - What does the coefficient of variation reveal...Ch. 8.3 - What is an efficient portfolio? How can the return...Ch. 8.3 - Prob. 8.9RQ Ch. 8.3 - How does international diversification enhance...

Standard deviation of returns. Introduction: The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.

Solution Summary: The author explains the standard deviation of returns, which measures the volatility of the stock and the dispersion of asset risk around its mean.

Concept explainers

Videos

To discuss:

Standard deviation of returns.

Introduction:

The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.

To discuss:

Expected range of return outcomes.

Introduction:

Return: In financial context, return is seen as percentage that represents the profit in an investment.

To determine:

Probability distribution.

Want to see the full answer?

Chapter 8 Solutions

Standard deviation of returns. Introduction: The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.

Solution Summary: The author explains the standard deviation of returns, which measures the volatility of the stock and the dispersion of asset risk around its mean.

Concept explainers

Videos

To discuss: Standard deviation of returns. Introduction: The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.

To discuss: Expected range of return outcomes. Introduction: Return: In financial context, return is seen as percentage that represents the profit in an investment.

To determine: Probability distribution.

Want to see the full answer?

Chapter 8 Solutions

To discuss:

Standard deviation of returns.

Introduction:

The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.

To discuss:

Expected range of return outcomes.

Introduction:

Return: In financial context, return is seen as percentage that represents the profit in an investment.

To determine:

Probability distribution.