Based on the following information, what is the variance? State of Economy Probability of State of Economy Rate of Return if State Occurs Recession 0.29 − 9.70% Normal 0.40 11.20% Boom 0.31 22.20%
A) 0.12536 B) 0.02357 C) 0.01572 D) 0.03143 E) 0.07840
Expected return=Respective return*Respective probability
=(0.29*-9.7)+(0.4*11.2)+(0.31*22.2)=8.549%
probability | Return | probability*(Return-Expected Return)^2 |
0.29 | -9.7 | 0.29*(-9.7-8.549)^2=96.5775403 |
0.4 | 11.2 | 0.4*(11.2-8.549)^2=2.8111204 |
0.31 | 22.2 | 0.31*(22.2-8.549)^2=57.7684383 |
Total=157.157099% |
Standard deviation=[Total probability*(Return-Expected Return)^2/Total probability]^(1/2)
=(157.157099)^(1/2)
=12.54%(Approx)
Variance=Standard deviation^2
=0.01572 (Approx).
Based on the following information, what is the variance? State of Economy Probability of State of...
MC algo 13-13 Calculating Variance Based on the following information, what is the variance? State of Economy Probability of State of Economy Rate of Return if State Occurs Recession .24 − 11.00% Normal .27 12.50% Boom .49 23.50% Multiple Choice .13848 .03835 .01918 .08842 .02877 MC algo 13-36 Expected Return A stock has an expected return of 10.80 percent. Based on the following information, what is the stock's return in a boom state of the economy? State of Economy Probability...
Based on the following information, what is the standard deviation of returns? State of Economy Probability of State of Economy Rate of Return if State Occurs Recession .23 − .091 Normal .46 .106 Boom .31 .216
Based on the following information, what is the expected retum? Probability of state of Economy State of Economy Recession Normal Boom Rate of Return if State Occurs 10.90% 12.40% 21.40% Multiple Choice o 10.81% o 922% o 16.26% o 763% o 13.53%
Consider the following information: Rate of Return if State Occurs State of Economy Boom Bust Probability of State of Economy 0.64 0.36 Stock A 0.29 0.07 Stock B Stock C 0.31 0.13 0.27 0.05 a. What is the expected return on an equally weighted portfolio of these three stocks? b. What is the variance of a portfolio invested 20 percent each in A and B and 60 percent in C?
Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Recession 0.20 0.03 -0.19 Normal 0.70 0.08 0.15 Boom 0.10 0.12 0.31 Required: Given that the expected return for Stock B is 9.800%, calculate the standard deviation for Stock B. (Do not round your intermediate calculations.)
Consider the following information: State of Economy Probability of State of Economy Rate of Return If State Occurs Stock A Stock B Stock C Boom 0.25 14% 15% 33% Bust 0.75 12% 3% -6% What is the expected return and standard deviation of returns on an equally weighted portfolio of these three stocks? 2. Consider the following information: State of Economy Probability of State of Economy Rate of Return If State Occurs Stock K Stock M Boom 0.10 25% 18%...
Based on the following information, what is the expected return? State of Economy Recession Normal Boom Probability of State of Economy .28 .41 .31 Rate of Return if State Occurs - 9.60% 11.10% 21.40% Multiple Choice 11.19% 8.07% 7.63% 8.50% 13.87%
Based on the following information, what is the standard deviation of returns? State of Economy Recession Normal Boom Probability of State of Economy .30 .33 .37 Rate of Return if State Occurs -.104 .119 .229 Multiple Choice 19.31% 0 13.68% 13.68% 24.95%
Based on the following information, what is the standard deviation of returns? State of Economy Recession Normal Boom Probability of State of Economy .27 .42 .31 Rate of Return if State Occurs -.095 .110 .220 Multiple Choice 12.10% 14.65% 19.53% 21.30% 15.82%
Based on the following information, what is the expected return? State of Economy Recession Normal Boom Probability of State of Economy .32 35 .33 Rate of Return if State Occurs -10.20% 11.70% 21.40% О 14.42% 0 776% 7.63% o 789% О 11.16%