Question

1. You are trying to develop a strategy for investing in two different stocks. The anticipated annual return for a $1,000 investment in each stock under four different economic conditions has the following probability distribution: Р (Y) Probability of Annual Р (Х) Economic Stock X Stock Y Condition Returns Returns Return (X) (y) (P) Recession 0.1 -50 -100 Slow Growth 0.3 20 50 Moderate 0.4 100 130 Growth Fast Growth 0.2 200 150 xP(x) a. What is the expected return value for Stock X? b. What the expected return value for Stock Y? (х — р)? Square the value from the left column Рх) (х — р)?Р(x) Stock X (х — р) Subtract the expected value of Stock X Returns (x) 0.1 -50 0.3 20 100 0.4 0.2 150 Compute the variance of Stock X. Compute the standard deviation of Stock X c. d. (у - р)РО) РО) Stock Y (y ) Subtract the expected value of Stock Y (у — р) Square the value from the left column Returns (y) -100 0 1 50 0.3 130 0.4 200 0.2 e. Compute the variance of Stock Y f. Compute the standard deviation of Stock Y. g. Compare the expected value and standard deviation of both stocks. Would you invest in Stock X or Stock Y? Explain with statistical support 3

Answer 1

As HOMEWORKLIB RULES rule, i will complete 6 bits ,due to confussion about (g) .

please send the separate bit .i will answer it .

Thank you!