An anaryst nas preaictea tne Toiiowing returns tor Stock A ana StocK tb in three possioie...
An analyst has predicted the following returns for Stock A and Stock B in three possible states of the economy. State Probability A Boom Normal Recession 0.24 0.27 0.49 0.16 0.20 0.10 0.17 0.25 a. What is the probability of a recession? (Round your answer to 2 decimal places.) Probability 0.26 b. Calculate the expected return for Stock A and Stock B. (Round your answers to 2 decimal places) Expected Return Stocks A Stocks B c. Calculate the expected return...
An analyst has predicted the following returns for Stock A and Stock B in three possible states of the economy State Probabili Boom Normal Recession 0.25 .24 0.27 0.49 0.160.20 0.10 0.17 a. What is the probability of a recession? (Round your answer to 2 decimal places.) Probability 0.26 b. Calculate the expected return for Stock A and Stock B. (Round your answers to 2 decimal places Expected Return Stocks A Stocks B C. Calculate the expected return for a...
Rate of Return if State Occurs Probability of State of State of Economy Recession Economy Stock A Stock B 0.20 0.06 -0.11 Normal 0.55 0.13 0.17 Вoom 0.25 0.18 0.37 a. Calculate the expected return for the two stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Expected return for A Expected return for B % 12.85 0.95 b. Calculate the standard deviation for the...
Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone: (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) State of Economy Recession Normal Boom Probability of State of Economy 0.45 0.40 0.15 Security Return if State Occurs -5.00% 12.00 16.00 Answer is complete but not entirely correct. Expected return 7.80 %
An investor is considering the purchase of Gryphon stock, which has returns given in the table below. Scenario Probability Rate of Return Recession 0.27 2% Normal 0.58 9% Boom 0.15 14% Calculate the expected return and standard deviation of Gryphon. Round your answers to 2 decimal places. Enter your answers below. E(r) = Correct response: 7.86 % Std. Dev. = Correct response: 3.96±0.01 % The investor decides to diversify by investing $8,000 in Gryphon stock and $7,000 in Royal stock...
Bond Fund Rate of Return Scenario Severe recession Mild recession Normal growth Boom Stock Fund Rate of Return -415 -11.09 Probability 0.05 0.20 0.30 0.65 343 a. Calculate the values of mean return and variance for the stock fund. (Do not round intermediate calculations. Round "Mean return value to 1 decimal place and "Variance" to 4 decimal places.) Answer is complete but not entirely correct. % Mean return Variance 13.5 40.7000 40.7000 squared b. Calculate the value of the covariance...
probabilty rate of returnrecession 0.11 -4%normal 0.4 11%boom 0.49 15%expected return = 11.31standard deviation = 5.70Q: The investor decides to diversify by investing $3,000 in Gryphon stock and $2,000 in Royal stock, which has an expected return of 5.5% and a standard deviation of 9.4%. The correlation coefficient for the two stocks' returns is 0.8. Calculate the expected return and standard deviation of the portfolio. Round your answers to 2 decimal places.
Use the following information on states of the economy and stock returns to calculate the standard deviation of returns. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Probability State of Economy of Security Return if State Occurs -10.00% 15.00 21.00 State of Economy 0.50 0.45 0.05 Recession Normal Boom Answer is complete but not entirely correct. Standard deviation 15.29 $ %
9. Award: 7.69 points Problem 13-7 Calculating Returns and Standard Deviations (L01) Consider the following information: State of Economy Recession Normal Boom Probability of State of Economy 0.15 0.55 0.30 Rate of Return if State Occurs Stock A Stock B 0.17 0.21 0.16 0.18 0.24 0.23 Calculate the expected return for each stock. (Do not round intermediate calculations. Round the final answers to 2 decimal places.) Expected return Stock A Stock B Calculate the standard deviation for each stock. (Do...
Compute the expected return given these three economic states, their likelihoods, and the potential returns: (Round your answer to 2 decimal places.) Economic State Probability Return Fast growth 0.26 60 % Slow growth 0.37 27 Recession 0.37 –39