a. What is the average annual return on each investment? b. What is the standard deviation...
Problem 8-05 Two investments generated the following annual returns: Investment X Investment Y 20x0 13% 17 % 20X1 24 20X2 18 20x3 14 20X4 12 a. What is the average annual return on each investment? Round your answers to one decimal place. The average annual rate of return on X: % The average annual rate of return on Y: b. What is the standard deviation of the return on investments X and Y? Round your answers to two decimal places....
Problem 8-05 Two investments generated the following annual returns: Investment x 13% Investment Y 24% 22 19 20x0 20X1 20x2 20x3 20X4 16 a. What is the average annual return on each investment? Round your answers to one decimal place. The average annual rate of return on X: The average annual rate of return on Y: b. What is the standard deviation of the return on investments X and Y? Round your answers to two decimal places. Standard deviation of...
An investment is expected to generate an average return of 10% with a standard deviation of 5%. With 95% confidence level, the actual rate of return will fall between: A. -5% to 25%. B. -10% to 30%. C. 0% to 20%. D. 5% to 15%.
An investment is expected to generate an average return of 10% with standard deviation of 5%. With 95% confidence level, the actual rate of return will fall between: A. 0% to 20%. B. 5% to 15%. C. -10% to 30%. D. -5% to 25%.
xyz stock has an average annual return of 15% with an annual return standard deviation of 50%. what loss level can we expect over a two-year investment horizon with a probability of 17%? A) -35.00% B) -28.12% C) -25.05% D) -40.71%
Problem 1 (14 marks): Consider the following historical returns on two investments A and B. The average risk-free rate during the 2011-2015 period was equal to 3%. Annual return (%) Year Investment A Investment B 2015 5% -5% -2% 2014 -20% 15% 2013 30% 20% 2012 40% 2011 5% 10% a) Calculate the average return and the risk premium for each investment. Which investment is likely to be is riskier? Explain. (6 marks) b) Calculate the standard deviation for each...
The expected annual returns are 15% for investment 1 and 12% for investment 2. The standard deviation of the first investment's return is 10%; the second investment’sreturn has a standard deviation of 5%. Which investment is less risky based solely on standard deviation? Which investment is less risky based on coefficient ofvariation? Which is a better measure given that the expected returns of the two investments are not the same?
an investment had an average return of 15% and a standard deviation of 20% over the last 100 years. Assuming the investment had a normal distribution, how many of the 100 years did the investment lose more than 5%?
Stock X has an expected return of 7 percent, a standard deviation of returns of 28 percent, a correlation coefficient with the market of –0.5, and a beta coefficient of –0.6. Stock Y has an expected return of 14 percent, a standard deviation of 15 percent, a 0.7 correlation with the market, and a beta of 0.9. Which security would be riskier if it were held by itself as a single investment? a. Stock Y b. Both would be equally...
The average historical annual return on a stock is 7.16%, with a standard deviation of 44.35%. What is the 97.5% annual value-at-risk (VaR) on a $1 million investment in this stock? Select one: a. -$371,900 b. -$443,000 c. -$815,400 d. -$975,000 e. -$1,000,000