ZuoTi.Pro
Question

Suppose the following distribution describes the possible returns from a portfolio in 1 year: there is...

Suppose the following distribution describes the possible returns from a portfolio in 1 year: there is a 36% chance of the portfolio return being -9%, a 15% chance the portfolio return is 3%, a 10% chance the portfolio return is 10%, and otherwise, the portfolio return will be 22%. What is the expected return on the portfolio? (please express your answer as a percentage and use 2 decimal places)

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Answer - expected return on portfolio = 6.79%

o t 1% t 8.58%

If the solution helped, please give it a thumbs up. Thank you.

0 0
Add a comment
Know the answer?
Add Answer to:
Suppose the following distribution describes the possible returns from a portfolio in 1 year: there is...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • The historical returns on a balanced portfolio have had an average return of 8% and a...

    The historical returns on a balanced portfolio have had an average return of 8% and a standard deviation of 15%. Assume that returns on this portfolio follow a normal distribution. [Use Excel commands instead of the z table.] a. What percentage of returns were greater than 53%? (Round your answer to 2 decimal places.)

  • Please provide simple explanation 6 The historical returns on a balanced portfolio have had an average...

    Please provide simple explanation 6 The historical returns on a balanced portfolio have had an average return of 10% and a standard deviation of 11%. Assume that returns on this portfolio follow a normal distribution. [You may find it useful to reference the z table.] a. What percentage of returns were greater than 43%? (Round your answer to 2 decimal places.) 5.33 points Percentage of returns 1.30: % eBook References b. What percentage of returns were below -1%? (Round your...

  • 2. Portfolio Choice Suppose we have assets A and B with the following distribution of returns:...

    2. Portfolio Choice Suppose we have assets A and B with the following distribution of returns: Probability Return for A .01 Return for B -.14 .00 .03 TO .05 .07 14 .30 .09 .50 a. Compute the expected returns for assets A and B, rA and rg. b. Compute the variances of A and B, oả and oß. c. Compute the covariance of A and B, CAR- d. Use the formulas for portfolio returns and risk to write the expected...

  • Question 8 (0.2 points) Consider the following probability distribution of returns on stock XYZ. What is...

    Question 8 (0.2 points) Consider the following probability distribution of returns on stock XYZ. What is the expected return of stock XYZ? (Enter your answer as a percentage rounded to 2 decimal places. For example, enter 8.43%, instead of 0.0843) Probability Return 0.20 -3% 0.40 12% 0.40 27% Your Answer: Answer units View hint for Question 8 Question 9 (0.2 points) Calculate the expected return on a portfolio that contains 30% of a stock with an expected return of 1%...

  • A portfolio produces the following returns in years 1-5: Year Return (%) Year Return (%) 1...

    A portfolio produces the following returns in years 1-5: Year Return (%) Year Return (%) 1 5 2 -1 3 -9 4 1 5 3 What is the Sharpe ratio of this portfolio, if the average risk-free rate over the same time period was 3%? Enter answer accurate to 2 decimal places. Please explain each step and do it on the excel.

  • . (Portfolio beta and security market line) You own a portfolio consisting of the following stocks...

    . (Portfolio beta and security market line) You own a portfolio consisting of the following stocks The risk-free rate is 4 percent. Also, the expected return on the market portfolio is 9 percent. a. Calculate the expected return of your portfolio (Hint: The expected return of a portfolio equals the weighted average of the individual stocks' expected returns where the weights are the percentage invested in each stock.) b. Calculate the portfolio beta. c. Given the foregoing information, plot the...

  • The historical returns on a portfolio had an average return of 21 percent and a standard...

    The historical returns on a portfolio had an average return of 21 percent and a standard deviation of 29 percent. Assume that returns on this portfolio follow a bell-shaped distribution. a. Approximately what percentage of returns were greater than 79 percent? (Round your answer to the nearest whole percent.) b. Approximately what percentage of returns were below –66 percent? (Round your answer to 1 decimal place.) ____________________________________________________________________________________________________________________________ The following relative frequency distribution was constructed from a population of 400. Calculate...

  • The historical returns on a balanced portfolio have had an average return of 13% and a...

    The historical returns on a balanced portfolio have had an average return of 13% and a standard deviation of 16%. Assume that returns on this portfolio follow a normal distribution. [You may find it useful to reference the z table.] a. What percentage of returns were greater than 45%? (Round your answer to 2 decimal places.) b. What percentage of returns were below −35%? (Round your answer to 2 decimal places.)

  • Please show work and all steps! The realized returns for stock A and stock B from...

    Please show work and all steps! The realized returns for stock A and stock B from 2004-2009 are provided in the table below Year 2004 2005 2006 2007 2008 2009 Stock A -8% 22% 7% -3% 4% 11% Stock B 20% 6% 29% -4% -9% 24% Suppose you create a portfolio that is 60% invested in stock A and 40% invested in stock B. The correlation between the returns of the two stocks is 6.27% (a) Calculate the expected return...

  • The historical returns on a portfolio had an average return of 15 percent and a standard...

    The historical returns on a portfolio had an average return of 15 percent and a standard deviation of 18 percent. Assume that returns on this portfolio follow a bell-shaped distribution. a. Approximately what percentage of returns were greater than 33 percent? (Round your answer to the nearest whole percent.) Percentage of returns b. Approximately what percentage of returns were below –21 percent? (Round your answer to 1 decimal place.) Percentage of returns

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT