4. Stock A and B have the following probability distribution:
Probability |
A |
B |
10% |
-10% |
-25% |
20% |
2% |
0 |
45% |
14% |
20% |
15% |
18% |
30% |
10% |
22% |
45% |
What is the expected return for A and B?
Expected Return for A =10%*-10%+20%*2%+45%*14%+15%*18%+10%*22%
=10.60%
Expected Return for
B=10%*-25%+20%*0%+45%*20%+15%*30%+10%*45%=15.50%
4. Stock A and B have the following probability distribution: Probability A B 10% -10% -25%...
Given the probability distribution below, calculate the expected rate of return for stock A and stock B Rate of return (%) Probability Stock A Stock B 0.1 10 35 0.2 2 0 0.4 12 20 0.2 20 25 0.1 38 45 Stock A = 14%; Stock B = 21% Stock A = 23% ; Stock B = 12% Stock A = 25%; Stock B = 15% Stock A =31% ; Stock B = 27%
You are given the following probability distribution of returns for stock J: A probability of .2 that the return will be 12%; a probability of .35 that the return will be 18%; a probability of .3 that the return will be -10%; and a probability of .15 that the return will be 10% What is the expected return of this stock?
Returns for Stocks A and Stock B have the following distribution: Probability Rate of Return Stock A Rate of Return Stock B 0.20 +16% -10% 0.30 +10% -6% 0.50 -30% +40% a) What is the Expected Return for Stock A? b) What is the Standard Deviation for Stock A? c) What is the Expected Return for Stock B? d) What is the Standard Deviation for Stock B? e) What is the Expected Return for a Portfolio with an equal 50%...
Consider the following information about three stocks: Rate of Return If State Occurs State of Probability of Economy Economy Boom Normal Bust State of Stock B 56 .14 -.46 25 45 .30 25 .22 .30 .30 c-1. If the expected inflation rate is 4.30 percent, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. What are the...
(4) Given the following table of a probability distribution of two stocks' rate of return, which stock you are going to pick, why? Probability 0.1 0.2 0.4 0.2 0.1 Stock A Return - 10% 2% 12% 20% 38% Stock B Return -35% O 20% 25% 45%
Expected Returns: Discrete Distribution The market and Stock J have the following probability distributions: Probability rM rJ 0.3 15% 18% 0.4 9 7 0.3 20 11 Calculate the expected rate of return for the market. Round your answer to two decimal places. % Calculate the expected rate of return for Stock J. Round your answer to two decimal places. % Calculate the standard deviation for the market. Round your answer to two decimal places. % Calculate the standard deviation for...
Outcome Probability .10 .20 UAWN Stock W +2% +18% +9% -12% +8% Stock X +25% +10% +14% +3% -10% .10 a. What is the expected return for each stock? b. What is the standard deviation for each stock? c. What is the correlation between the stocks? d. If you hold a portfolio of the stocks that is weighted 60% W, and 40% X, what is the expected return and standard deviation for the portfolio? e. Assume that Stock X is...
Question 3 Roenfeld Corp. believes the following probability distribution exists for its stock. What is the expected return of the company's stock? State of the Economy Probability. Return Expected Boom 0.35 25% Normal 0.40 15% Recession 0.25 13% 17% 15% 14% 16%
1. The market and Stock A have the following probability distributions: Return on Return on Probability market Stock A 0.2 18% 16% 0.3 12% 14% 1 0 .5 10% 11% a. Calculate the expected rates of return for the market and Stock A. b. Calculate the coefficient of variation for the market and Stock A (Standard deviation for market is 3.0265% and standard deviation for Stock A is 2.0224%).
Two stocks under evaluation have the following probability distribution for their rate of returns. Probability 30% 20% 50% Rate of Return Stock A Stock B 18% 10% -2% 5% 10% 0% Table Q1 (a) Explain the expected return for each of the stocks by giving the value. (3 marks) (b) Explain the standard deviation for the return of each of the stocks by giving the value. (6 marks) (c) Explain the correlation coefficient between the returns of the two stocks...