Outcome Probability Return
Boom 60% 30.4%
Normal 25% 15.5%
Recession 10% 10.1%
Depression 5% 5.7%
What is the arithmetic expected return on this asset?
Expected Return is weighted average return.
Expected return = P1 *R1 + P2 * R2 + ..... + Pn * Rn
Expected Return = 60% * 30.4% + 25% * 15.5% + 10% * 10.1% + 5% * 5.7%
Expected Return = 18.24% + 3.88% + 1.01% + 0.29%
Expected Return = 23.41%
Outcome Probability Return Boom 60% 30.4% Normal 25% 15.5% Recession 10% 10.1% Depression 5% 5.7% What...
Outcome Probability Return Boom 60% 0.26 Normal 25% 0.19 Recession 10% 0.14 Depression 5% 0.10 What is the variance of this asset's returns?
Consider the following scenario analysis: Rate of ReturnScenarioProbabilityStocksBondsRecession0.20-5%14% Normal economy 0.60158Boom0.20 254Assume a portfolio with weights of .60 in stocks and .40 in bonds. a. What is the rate of return on the portfolio in each scenario? (Do not round percent rounded to 1 decimal place.) Rate of Return Recession Normal economy Boomb. What are the expected rate of return and standard deviation of the portfolio? (Do not round intermediate calculations. Enter your answer as...
A
B
Boom
1/3
25%
1%
Normal
1/3
5%
5%
Recession
1/3
-5%
12%
Refer to the attachment, which provides expected returns for 2 assets- "A" & "B" for 3 different states of nature: Boom, Normal, & Recession. Each state is considered to be equally probable. For each of the following calculations, express your answer in percentage terms, rounded to 2 decimal places (ie 22.00). What is the expected return for Asset A, E(RA)? % What is the expected standard...
Consider the following information: State Probability ABC, Inc. Return Boom .25 0.154 Normal .50 0.08. Slowdown .15 0.04 Recession .10 -0.034 1) 2) 3) What is the expected return?- What is the variance? What is the standard deviation?
State of the market Probability Expected Return X Expected Return Y Boom 5% +30% +2% Normal 15% +3% -5% Recession 80% -5% -10% 1) IN the context of scenario analysis: what is expected return? What is Standard Deviation? How are they used to analyze possible securities? 2) Ca lulate the expdected return and standard deviation of stock X and stock Y.
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%
Consider the following information on returns and probabilities: State Probability X Z Boom .25 15% 10% Normal .60 10% 9% Recession .15 5% 10% What is the standard deviation for a portfolio with an investment of $6,000 in asset X and $4,000 in asset Z? A) 6.10% B) 8.15% C) 1.85% D) 3.00% E) 5.18%
Consider the following scenario analysis: Scenario Recession Normal economy Boom Rate of Return Probability Stocks Bonds 0.20 -5% 14% 0.60 158 0.20 1 25 4 a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms? • Yes No b. Calculate the expected rate of return and standard deviation for each investment. (Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place.) Expected Rate of Return Standard...
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%
What is the standard deviation of portfolio A? please show
work
State Boom Normal Recession Probability 30% 40% 30% Return for Portfolio A 20% 10% -10% Return for Portfolio B 30% 15% -15%