4. How does risk (standard deviation) grows with the holding period in a random walk?
4. How does risk (standard deviation) grows with the holding period in a random walk?
Homework Answers
Risk is measured by Beta and beta can be determined with the help of Standard Deviation. Beta more than 1.0 is volatile and less than that is less volatile. The more volatile the stock price, the more risky in nature it is. Holding period is when you hold an asset or a portfolio over a period and expect a return on it. Now the connection in between holding period and risk volatility is that, holding a stock for a longer term could alleviate any temporary volatilities that takes place in the business or the market. Portfolios are designed in a way that average returns and standard deviations benefit the overall returns over the period to the investor. Risk may grow along withe holding period only when the stock performance is consistently proving to be a failure, not in the case of consistently performing well.
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4. How does risk (standard deviation) grows with the holding
period in a random walk?
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If holding assets in a diversified portfolio, why is beta, and not standard deviation, the appropriate...
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please show all work. holding period retum? (Standard deviation) The following expectations have been made of...
please show all work.
holding period retum? (Standard deviation) The following expectations have been made of a project. Compute the projecte expected return and standard deviation. Economic state Poor Average Good Excellent Probability of state .25 50 20 Return -10% 5% 0% 20% 1
a. Given the following holding-period returns, compute the average returns and the standard deviations for the...
a. Given the following holding-period returns, compute the
average returns and the standard deviations for the Zemin
Corporation and for the market.
b. If Zemin's beta is 1.98 and the risk-free rate is 7
percent, what would be an expected return for an investor owning
Zemin? (Note: Because the preceding returns are based on monthly
data, you will need to annualize the returns to make them
comparable with the risk-free rate. For simplicity, you can
convert from monthly to...
(CAPM and expected returns) a Given the following holding period retums, mh compute the average rums...
(CAPM and expected returns) a Given the following holding period retums, mh compute the average rums and the standad deviations for the Zemin Coporation and for the market b. If Zemin's beta is 1.32 and the risk-free rate is 7 percent, what would be an expected returs for an investor owning Zemin? (Note Because the precedng retus are based on montly daa, you wil reod to avuaire the retums to make them comparable with the risk-fhee rate. For smplicity, ycan...
(Related to Checkpoint 8.3) (CAPM and expected returns) a. Given the following holding-period retuns, EB, compute...
(Related to Checkpoint 8.3) (CAPM and expected returns) a. Given the following holding-period retuns, EB, compute the averace returns and the standard deviations for the Sugita Corporation and for the market. f Sugita's beta is 1.46 and the risk-free rate is 9 percent, what would be an expected return for an investor owning Sugita? (Note: Because the preceding returns a them comparable with the risk-free rate. For simplicity, you can convert from monthly to yearly returns by multiplying the average...
Please hurry. will rate thumbs up. What kind of risk does the standard deviation of an...
Please hurry. will rate thumbs up.
What kind of risk does the standard deviation of an individual asset measure?
How would you measure risk besides volatility or standard deviation?
How would you measure risk besides volatility or standard deviation?
4. Standard deviation and risk. The standard deviation o(X) of a random variable is the square root of the variance that is o(X) = Var(X). It characterizes the "spread" of the random variable X. If a random variable X has expected value p and standard deviation o, then X takes values which are on average at distance o from u. Imagine you have the choice to invest in two stock funds: an American fund with a rate return X and...
a. Given the following holding period returns, compute the average returns and the standard deviations for the Zen Corporation and for the market b. Zomb is 106 and ther e is 7 percent we would be an expected return for an investor o m Because the precedings are based on m to make them comprate with skrerateFor simplicity you can convert from m y to your by gyng e rgement returns by 12) C. How does Zem's historical average retum...
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please show all work.
holding period retum? (Standard deviation) The following expectations have been made of a project. Compute the projecte expected return and standard deviation. Economic state Poor Average Good Excellent Probability of state .25 50 20 Return -10% 5% 0% 20% 1
a. Given the following holding-period returns, compute the
average returns and the standard deviations for the Zemin
Corporation and for the market.
b. If Zemin's beta is 1.98 and the risk-free rate is 7
percent, what would be an expected return for an investor owning
Zemin? (Note: Because the preceding returns are based on monthly
data, you will need to annualize the returns to make them
comparable with the risk-free rate. For simplicity, you can
convert from monthly to...
(CAPM and expected returns) a Given the following holding period retums, mh compute the average rums and the standad deviations for the Zemin Coporation and for the market b. If Zemin's beta is 1.32 and the risk-free rate is 7 percent, what would be an expected returs for an investor owning Zemin? (Note Because the precedng retus are based on montly daa, you wil reod to avuaire the retums to make them comparable with the risk-fhee rate. For smplicity, ycan...
(Related to Checkpoint 8.3) (CAPM and expected returns) a. Given the following holding-period retuns, EB, compute the averace returns and the standard deviations for the Sugita Corporation and for the market. f Sugita's beta is 1.46 and the risk-free rate is 9 percent, what would be an expected return for an investor owning Sugita? (Note: Because the preceding returns a them comparable with the risk-free rate. For simplicity, you can convert from monthly to yearly returns by multiplying the average...
Please hurry. will rate thumbs up.
What kind of risk does the standard deviation of an individual asset measure?
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