Table is filled below :
Ri | Pri | Ri-Rexp | (Ri-Rexp)^2 | (Ri-Rexp)^2 * Pri |
3 | 1/5 | -5.6 | 31.36 | 6.272 |
10 | 2/5 | 1.4 | 1.96 | 0.784 |
12 | 1/5 | 3.4 | 11.56 | 2.312 |
8 | 1/5 | -0.6 | 0.36 | 0.072 |
Var | 9.44 | |||
stddev | 3.07 |
Normal plot is shown below :
Help! 4. What is the expected return on an IBM bond if the return is 3%...
Help
4. What is the expected return on an IBM bond if the return is 3% one fifth of the time, 10% two fifths of the time, 12% one fifth of the time, and 8% the rest of the time? Variance = o? - Probability state (Returnstate 1 -Rexpected) Standard Deviation = c = V02 a. Estimate the Variance and Standard Deviation (Just fill in the table below). (1) (2) (3) (4) 15) R P n Ri-Rexpected (R-Rrected) (Re-Rexpected ....
Asset A has an expected return of 15% and Asset B has an expected return of 12%. Based on a probability distribution, the standard deviation for Asset A is 10% and the standard deviation for Asset B is 5%. a.) Based only on the standard deviation, which investment is less risky? Discuss your reasons for your selection including why you feel that asset is less risky. b.) Calculate the coefficient of variation for each asset and post your answers. Based...
issue on an individual asset - what is the expected return,
variance and standard deviation of asset A only
I WA TISK and fetui11 man those that are provided in the article. The table below gives information on three risky assets: A, B, and C. Correlations Asset Expected return Standard Deviation of the Return B C 0.4 0.15 11.5 23 0.25 B 14 43 0.25 1 " CI 18 58 0.4 0.15 There is also a risk-free asset F whose...
Help please
7. Calculate the Expected Return and Standard Deviation of the individual asset A and B presented below. ASSET A State Pr State Return in State Pr R(A) -15 % Pr*R Deviation Deviation Squared Deviation Sq *Pr 1 0.4 2 0.6 5% E(R)= Variance Asset A- sd asset A ASSET B State Pr State Return in State Pr*R Deviation Deviation Squared Deviation Sq *Pr State R(B) Pr 25% 0.4 1 15% 0.6 2 Variance Asset B= E(R) sd Asset...
Suppose you invest your risky portfolio into one stock and one corporate bond. 50% of your fund is invested in a stock with an expected return of 14% and a standard deviation of 24%. The rest 50% of your fund is invested in a corporate bond with an expected return of 6% and a standard deviation of 12%. The stock and the bond have a correlation of 0.55. What are the expected return and the standard deviation of the resulting...
Expected Return, Varianoe & Standard Deviation Suppose your expectations of the stock market are shown as follows: Prob r(s) Boom 0.2 30% Normal 0.5 20% Recession 0.3 -20% (Expected Return(E(r)), variance(o2) and standard deviation (o) Compute the mean of the rate of return on stocks. Risk Premium & Capital Allocation Consider when you decide to invest in a risky portfolio P (with the expected return of 20% and standard deviation of 30 %) and a Treasury bill (The rate of...
3. You have a risky portfolio that yields an expected rate of return of 15% with a standard deviation of 25%. Draw the CAL for an expected return/standard deviation diagram if the risk free rate is 5%. a. What is the slope of the CAL? b. If your coefficient of risk aversion is 5, how much should you invest in the risky portfolio? 4. A pension fund manager is considering three mutual funds. The first is a stock fund, the...
You put half of your money in a stock portfolio that has an expected return of 14% and a standard deviation of 24%. You put the rest of your money in a risky bond portfolio that has an expected return of 6% and a standard deviation of 12%. The stock and bond portfolios have a correlation of .55 and TB or Rf is 2%. What is the SR of the resulting portfolio?
Suppose there are three assets: A, B, and C. Asset A’s expected return and
standard deviation are 1 percent and 1 percent. Asset B has the same expected
return and standard deviation as Asset A. However, the correlation coefficient of
Assets A and B is −0.25. Asset C’s return is independent of the other two assets.
The expected return and standard deviation of Asset C are 0.5 percent and 1
percent.
(a) Find a portfolio of the three assets that...
A portfolio has an expected rate of return of 10% and a standard deviation of 29%. The risk-free rate is 2.50%. An investor has the following utility function: U = E(r) - (1/2)A*Variance. Which value of A makes this investor indifferent between the risky portfolio and the risk-free asset?