The investment possible returns and related probabilities are in Table 2. State of Economy Probability of Occurrence Rate of Return Stock G1 (%) Rate of Return Stock G2 (%) Boom 0.35 -10 15 Normal 0.55 8 -9.25 Recession 0.1 32.5 22.5 Table 2 Calculate for both investment:- i. Expected return (4 marks) ii. Standard deviation
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Please provide the expected return and the standard deviation to the table above. Question 13 Susan is considering investing in a company's stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment. Probability Return 0.1 25.00% Boom Good 0.1 15.00% Level 10.00% Slump 0.5 -5.00% Use the table of returns and probabilities above to determine...
What is the standard deviation of the returns on this stock? State of the Economy Probability E(R) Boom 0.33 24% Normal 0.55 12% Recession 0.12 -60%
6) Given the following find the expected return and standard deviation of stock returns for Y Inc. State Boom Recession Probability 0.55 0.45 Return 10.6% 4.2% 5 Marks
Calculate the standard deviation of the returns on Andrew’s Violins stock if projections include the following? State of Economy Probability of State Economy Rate of Return if State Occurs Boom 30% 15% Normal 65% 12% Recession 5% 6%
Variance and standard deviation (expected). Bacon and Associates, a famous Northwest think tank, has provided probability estimates for the four potential economic states for the coming year in the following table: The probability of a boom economy is 22%, the probability of a stable growth economy is 40%, the probability of a stagnant economy is 20%, and the probability of a recession is 18%. Calculate the variance and the standard deviation of the three investments: stock, corporate bond, and government...
Problem #5 (12 Marks) You have a portfolio with a standard deviation of 30% and an expected return of 18%. You are considering adding one of the two stocks in the table below to your portfolio. After adding the stock, you will have 20% of your money in the new stock and 80% of your money in your existing portfolio. A) Calculate the risk and return of a new portfolio with 20% invested in stock A and 80% in your...
Variance and standard deviation (expected). Bacon and Associates, a famous Northwest think tank, has provided probability estimates for the four potential economic states for the coming year in the following table: The probability of a boom economy is 23%, the probability of a stable growth economy is 41%, the probability of a stagnant economy is 24%, and the probability of a recession is 12%. Calculate the variance and the standard deviation of the three investments: stock, corporate bond, and government...
Solve please and show calculations. Thank you Question 5 5 pts Over the past six years, a stock had annual returns of 2 percent, -5 percent, 6 percent, 3 percent, 3 percent, and -2 percent, respectively. What is the standard deviation of these returns? 3.61 percent 3.97 percent 3.88 percent 3.33 percent O 3.29 percent Question 16 8 pts Given the following information, what is the standard deviation for this stock? (Hint: you'll need to find the expected return first)...
North Around, Inc. stock is expected to return 22 percent in a boom, 13 percent in a normal economy, and −15 percent in a recession. The probabilities of a boom, normal economy, and a recession are 6 percent, 92 percent, and 2 percent, respectively. What is the standard deviation of the returns on this stock? Please explain your answer.
Calculating returns and standard deviation. Based on the following information, can you calculate the expected return and standard deviation for the two stocks?: State of economy. Prob of st of econ Rate of return if state occurs Stock A Stock B Recession .25 .06 -.20 Normal .55 .07 .13 Boom .20 . .11 .33