A | B | ||
Boom | 1/3 | 25% | 1% |
Normal | 1/3 | 5% | 5% |
Recession | 1/3 | -5% | 12% |
Formula sheet:
A B Boom 1/3 25% 1% Normal 1/3 5% 5% Recession 1/3 -5% 12% Refer to...
Consider the following scenario analysis: Rate of ReturnScenarioProbabilityStocksBondsRecession0.20-5%14% Normal economy 0.60158Boom0.20 254Assume a portfolio with weights of .60 in stocks and .40 in bonds. a. What is the rate of return on the portfolio in each scenario? (Do not round percent rounded to 1 decimal place.) Rate of Return Recession Normal economy Boomb. What are the expected rate of return and standard deviation of the portfolio? (Do not round intermediate calculations. Enter your answer as...
< 087c3bf05caf46f2ae409104186c6b97.xlsx 6 Q No.3 Economy Recession Normal Good Boom Probability 20% 35% 35% 10% Stocks -5% 10% 14% 18% Bonds 15% 12% 11% 9% Part A 1. Calculate expected return and standard deviation of each stock and bonds. 2. Which investment is less risky based on standard deviation? Part B (part B will be solved separately from part A. You can only take data from question number 3 and make portfolio. In case of any problem recheck zoom recording...
What is the standard deviation of portfolio A? please show
work
State Boom Normal Recession Probability 30% 40% 30% Return for Portfolio A 20% 10% -10% Return for Portfolio B 30% 15% -15%
Solve please and show calculations. Thank you
Question 5 5 pts Over the past six years, a stock had annual returns of 2 percent, -5 percent, 6 percent, 3 percent, 3 percent, and -2 percent, respectively. What is the standard deviation of these returns? 3.61 percent 3.97 percent 3.88 percent 3.33 percent O 3.29 percent Question 16 8 pts Given the following information, what is the standard deviation for this stock? (Hint: you'll need to find the expected return first)...
Consider the following scenario analysis: Scenario Recession Normal economy Boom Rate of Return Probability Stocks Bonds 0.20 -5% 14% 0.60 158 0.20 1 25 4 a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms? • Yes No b. Calculate the expected rate of return and standard deviation for each investment. (Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place.) Expected Rate of Return Standard...
ABC Corporation stock is expected to return 25 percent in a boom, 12 percent in a normal economy, and -13 percent in a recession. The probabilities of a boom, normal economy and a recession are 7 percent, 90 percent and 3 percent, respectively. What is the standard deviation of the returns on this stock? 2.15 percent 19.54 percent 5.53 percent 6.23 percent
Outcome Probability Return Boom 60% 30.4% Normal 25% 15.5% Recession 10% 10.1% Depression 5% 5.7% What is the arithmetic expected return on this asset?
Home assignment 4 Consider following information Probability of the state of economy Rate of return if state occurs StockA StockB boom normal a. b. c. 0.2 0.8 0.4 0.2 0.05 Calculate the expected return of Calculate the variance and standard deviation of each stock. Calculate the covariance between stock A and B returns and the correlation coefficient. Calculate the expected return of the portfolio (Portfolio!) consisting 40% of stock A and 60% of stock B. Calculate the variance and standard...
State of Economy Boom Growth Stagnant Recession Probability of State 0.27 0.36 0.21 0.16 Return on Asset J in State 0.065 0.065 0.065 0.065 Return on Asset K in State 0.190 0.100 0.025 -0.150 Return on Asset L in State 0.280 0.200 0.050 -0.180 a. What is the expected return of each asset? b. What is the variance and the standard deviation of each asset? c. What is the expected return of a portfolio with 8% in asset J, 50%...
Consider the following information on returns and probabilities: State Probability X Z Boom .25 15% 10% Normal .60 10% 9% Recession .15 5% 10% What is the standard deviation for a portfolio with an investment of $6,000 in asset X and $4,000 in asset Z? A) 6.10% B) 8.15% C) 1.85% D) 3.00% E) 5.18%