The following are the returns ($) for two stocks: A B Expected monetary value 60 60...
The following are the returns ($) for two stocks: A B Expected monetary value 60 60 Standard deviation 20 10 Which stock would you choose and why?
Homework Answers
I will choose stock B
Explanation: When a stock's return has higher standard deviations, it means the stock is riskier and it's return is subject to higher rate of uncertainty and fluctuations.
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The following are the returns ($) for two stocks: A B Expected
monetary value 60 60...
letter b please You have estimated the following probability distribution of returns for two stocks: Stock...
letter b please
You have estimated the following probability distribution of returns for two stocks: Stock N Stock O Probability 0.20 0.30 Return 8% Probability 0.20 0.30 0.30 Return 26% 12 0.30 0.20 -4 0.20 -4 Calculate the expected rate of return and standard deviation for cach stock If the correlation between the returns on the two stocks is -0.40, calculate the portfolio returm and the standard deviation for portfolios containing 100%, 75 % , 50 % , 25 %...
please help Stocks A and B have the following returns Stock B Stock A 0.1 007...
please help
Stocks A and B have the following returns Stock B Stock A 0.1 007 004 2 34 0.04 0.12 0.06 4 004 003 5 0.08 0.04 a. What are the expected returns of the two stocks? b What are the standard deviations of the returns of the two stocks? e. If their comelation is 0.43 what is the expected return and standard deviation of a portfolio of 60% stock A and 40% stock B? a. What are the...
Stocks A and B have the following probability distributions: % Returns Probability A B 0.40 15...
Stocks A and B have the following probability distributions: % Returns Probability A B 0.40 15 35 0.10 10 20 0.30 -5 15 0.20 -15 -5 If you form a 50-50 portfolio of the two stocks, calculate the expected rate of return and the standard deviation for the portfolio. (Remember, you must calculate a new range of outcomes for the portfolio.) Briefly explain why the standard deviation for the portfolio would be less than the weighted average of the standard deviations...
s presented with the two following stocks 17. The investor Stock A Stock B Expected Return...
s presented with the two following stocks 17. The investor Stock A Stock B Expected Return Standard Deviation 30% 40% 60% 50% the portfolio that the expected return Assume that the correlation coefficient between the stocks is zero. What stock A invests 30% i A.20% B.37% 07a 18. The investor is presented with the two following stocks: Stock A Stock B Expected Return Standard Deviation 0% 40% 50% 60% Assume that the correlation coefficient between the stocks is zero. What...
Stocks A and B have the following returns:
P 12-8 (similar to) Stocks A and B have the following returns: Stock AStock B10.080.0520.040.0230.120.054-0.030.0350.07-0.04a. What are the expected returns of the two stocks? b. What are the standard deviations of the returns of the two stocks? c. If their correlation is 0.45, what is the expected return and standard deviation of a portfolio of 66% stock A and 34% stock B? a. What are the expected returns of the two stocks? The expected return for stock A is _______ (Round to three decimal places.)
8-6 EXPECTED RETURNS Stocks A and B have the following probability distributions of expected future returns:...
8-6 EXPECTED RETURNS Stocks A and B have the following probability distributions of expected future returns: Probability B 0.1 0.2 A (10%) 2 12 20 38 (35%) 0 20 0.4 0.2 0.1 45 a. Calculate the expected rate of return, fe, for Stock B (f = 12%). b. Calculate the standard deviation of expected returns, o , for Stock A (o, = 20.35%). Now calculate the coefficient of variation for Stock B. Is it possible that most investors will regard...
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2...
Consider the following 6 months of returns for 2 stocks and a
portfolio of those 2 stocks:
The
portfolio is composed of 50% of Stock A and 50% of Stock
B.
a. What is the expected return and standard deviation of returns
for each of the two stocks?
b. What is the expected return and standard deviation of returns
for the portfolio?
c. Is the portfolio more or less risky than the two stocks?
Why?
this is the entire question...
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks: EEB No...
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks: EEB Note: The portfolio is composed of 50% of Stock A and 50% of Stock B a. What is the expected return and standard deviation of returns for each of the two stocks? b. What is the expected return and standard deviation of returns for the portfolio? c. Is the portfolio more or less risky than the two stocks? Why? Stock A Stock...
Two stocks under evaluation have the following probability distribution for their rate of returns. Probability 30%...
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...
letter b please 3. Consider two stocks, A and B, with their expected returns and standard...
letter b please
3. Consider two stocks, A and B, with their expected returns and standard deviations, as follows: Stock Expected return Standard deviation 15% 10 10% What is the expected retum if the portfolio contains equal amounts of each security? What is the standard deviation for the equally weighted portfolio in a) if the correlation between the security retums is i) Cor +1.00. ii) Cors+0.50, and iii) Corras - -0.50? a) 12.5%; b) i. 9%; ii. 7.81%; iii. 4.58%
letter b please
You have estimated the following probability distribution of returns for two stocks: Stock N Stock O Probability 0.20 0.30 Return 8% Probability 0.20 0.30 0.30 Return 26% 12 0.30 0.20 -4 0.20 -4 Calculate the expected rate of return and standard deviation for cach stock If the correlation between the returns on the two stocks is -0.40, calculate the portfolio returm and the standard deviation for portfolios containing 100%, 75 % , 50 % , 25 %...
please help
Stocks A and B have the following returns Stock B Stock A 0.1 007 004 2 34 0.04 0.12 0.06 4 004 003 5 0.08 0.04 a. What are the expected returns of the two stocks? b What are the standard deviations of the returns of the two stocks? e. If their comelation is 0.43 what is the expected return and standard deviation of a portfolio of 60% stock A and 40% stock B? a. What are the...
s presented with the two following stocks 17. The investor Stock A Stock B Expected Return Standard Deviation 30% 40% 60% 50% the portfolio that the expected return Assume that the correlation coefficient between the stocks is zero. What stock A invests 30% i A.20% B.37% 07a 18. The investor is presented with the two following stocks: Stock A Stock B Expected Return Standard Deviation 0% 40% 50% 60% Assume that the correlation coefficient between the stocks is zero. What...
8-6 EXPECTED RETURNS Stocks A and B have the following probability distributions of expected future returns: Probability B 0.1 0.2 A (10%) 2 12 20 38 (35%) 0 20 0.4 0.2 0.1 45 a. Calculate the expected rate of return, fe, for Stock B (f = 12%). b. Calculate the standard deviation of expected returns, o , for Stock A (o, = 20.35%). Now calculate the coefficient of variation for Stock B. Is it possible that most investors will regard...
Consider the following 6 months of returns for 2 stocks and a
portfolio of those 2 stocks:
The
portfolio is composed of 50% of Stock A and 50% of Stock
B.
a. What is the expected return and standard deviation of returns
for each of the two stocks?
b. What is the expected return and standard deviation of returns
for the portfolio?
c. Is the portfolio more or less risky than the two stocks?
Why?
this is the entire question...
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks: EEB Note: The portfolio is composed of 50% of Stock A and 50% of Stock B a. What is the expected return and standard deviation of returns for each of the two stocks? b. What is the expected return and standard deviation of returns for the portfolio? c. Is the portfolio more or less risky than the two stocks? Why? Stock A Stock...
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...
letter b please
3. Consider two stocks, A and B, with their expected returns and standard deviations, as follows: Stock Expected return Standard deviation 15% 10 10% What is the expected retum if the portfolio contains equal amounts of each security? What is the standard deviation for the equally weighted portfolio in a) if the correlation between the security retums is i) Cor +1.00. ii) Cors+0.50, and iii) Corras - -0.50? a) 12.5%; b) i. 9%; ii. 7.81%; iii. 4.58%
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