a). Expected Return = [Weight(i) * Return(i)]
= [0.05 * 12.32%] + [0.15 * 13.70%] + [0.20 * 7.90%] + [0.25 * 11.14%] + [0.35 * 7.15%]
= 0.616% + 2.055% + 1.58% + 2.785% + 2.5025% = 9.5385%, or 9.54%
b). Standard Deviation = [{Weight(i) * (Expected Return - Return(i))2}]1/2
= [{0.05 * (9.5385% - 12.32%)2} + {0.15 * (9.5385% - 13.70%)2} + {0.20 * (9.5385% - 7.90%)2} + {0.25 * (9.5385% - 11.14%)2} + {0.35 * (9.5385% - 7.15%)2}]1/2
= [0.39%2 + 2.60%2 + 0.54%2 + 0.64%2 + 2.00%2]1/2 = [6.16%2]1/2 = 2.48%
Cht1-Pre Lecture Quiz See Help Save & Exit Su 4 Problem 11-C Measuring Risk and Return...
Problem 11-C Measuring Risk and Return Your investment advisor believes that recent stock returns should be given more consideration when calculating future returns and risk than older returns. The historical returns for Lately Lighthouse, Inc. are given in the table below, along with the weights that your advisor believes are appropriate. Use the corresponding weights in all calculations. Year 2012 2013 2014 2015 2016 Lately Stock 12.32% 13.70% 7.90% 11.14% 7.15% Weight 5% 15% 20% 25% 35% a. What is...
Saved Help Save & Exit Submit Problem 11-C Measuring Risk and Return Your investment advisor believes that recent stock returns should be given more consideration when calculating future returns and risk than older returns. The historical returns for Lately Lighthouse, Inc. are given in the table below, along with the weights that your advisor believes are appropriate. Use the corresponding weights in all calculations. Lately Stock Weight Year 2012 11.84% 5% 15% 2013 13.14% 8.30% 10.66% 7.95% 2014 20% 2015...
Your investment advisor believes that recent stock returns should be given more consideration when calculating future returns and risk than older returns. The historical returns for Lately Lighthouse, Inc. are given in the table below, along with the weights that your advisor believes are appropriate. Use the corresponding weights in all calculations. Weight 5% Year 2012 2013 2014 2015 2016 Lately Stock 12.02% 13.35% 8.15% 10.84% 7.65% 35% a. What is the expected return for Lately Lighthouse, Inc.? (Enter your...
Your investment advisor believes that recent stock returns should be given more consideration when calculating future returns and risk than older returns. The historical returns for Lately Lighthouse, Inc. are given in the table below, along with the weights that your advisor believes are appropriate. Use the corresponding weights in all calculations. Year Lately Stock Weight 2012 12.50 % 5 % 2013 13.91 % 15 % 2014 7.75 % 20 % 2015 11.32 % 25 % 2016 6.85 % 35...
Lecture Quiz Saved Help Save & Exit Submit Problem 11-B Measuring Risk Over the past five years, Corny Dogs, Inc. shareholders have had returns of 13.82%, 14.34%, 9.87%, 8.86%, and 8.98% respectively. What is the standard deviation of returns for Corny Dogs' stock? (Enter your answer as a percent rounded to two decimal places.) Standard deviation rences < Prey 3 of 4 Next >
Help Save & Exit Submit Check my work Problem 7-7 Expected return and standard deviation A game of chance offers the following odds and payoffs. Each play of the game costs $200, so the net profit per play is the payoff less $200. Probability 0.20 0.40 0.40 Payoff $600 400 Net Profit $400 200 -200 a-1. What is the expected cash payoff? (Round your answer to the nearest whole dollar amount.) a-2. What is the expected rate of return? (Enter...
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Homework 4 (Makeup for Oct 22 and 24) Saved Save & Exit Help Submit Check my work 5 Returns Year Y 12 % 1 25 % 2 28 34 10 points 3 13 4 7 -27 5 10 14 eBook Hint Using the returns shown above, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. (Do not round intermediate calculations. Enter your average return and standard deviation as a percent rounded to 2 decimal...