A portfolio offers an expected annual return of 10% and a standard deviation of 25%. The probability distribution of returns is normal.
What is the probability that this portfolio will give a return less than 10% over the next year?
(a) 0.50
(b) 0.35
We need at least 10 more requests to produce the answer.
0 / 10 have requested this problem solution
The more requests, the faster the answer.
a. The expected rate of return for portfolio A is: The standard deviation of portfolio A is: b. The expected rate of return for portfolio B is: The standard deviation for portfolio B is: (Computing the expected rate of return and risk) After a tumultuous period in the stock market, Logan Morgan is considering an investment in one of two portfolios. Given the information that follows, which investment is better, based on risk (as measured by the standard deviation) and...
A portfolio has average return of 13.2 percent and standard deviation of returns of 18.9 percent. Assuming that the portfolioi's returns are normally distributed, what is the probability that the portfolio's return in any given year is between -24.6 percent and 32.1 percent? A. 0.815 B. 0.835 ос C. 0.950 D. 0.975 A portfolio has expected return of 13.2 percent and standard deviation of 18.9 percent. Assuming that the returns of the portfolio are normally distributed, what is the probability...
Aaron owns a two-stock portfolio that invests in Blue Llama Mining Company (BLM) and Hungry Whale Electronics (HWE). Three- quarters of Aaron's portfolio value consists of BLM's shares, and the balance consists of HWE's shares. Each stock's expected return for the next year will depend on forecasted market conditions. The expected returns from the stocks in different market conditions are detailed in the following table: Blue Llama Mining Market Condition Probability of Occurrence Hungry Whale Electronics 21% Strong 25% 15%...
Dominic owns a two-stock portfolio that invests in Happy Dog Soap Company (HDS) and Black Sheep Broadcasting (BSB). Three- quarters of Dominic's portfolio value consists of HDS's shares, and the balance consists of BSB's shares. Each stock's expected return for the next year will depend on forecasted market conditions. The expected returns from the stocks in different market conditions are detailed in the following table: Market Condition Happy Dog Soap Black Sheep Broadcasting Strong 25% 35% Probability of Occurrence 0.50...
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks: The portfolio is composed of 50% of Stock A and 50% of Stock B. a. What is the expected return and standard deviation of returns for each of the two stocks? b. What is the expected return and standard deviation of returns for the portfolio? c. Is the portfolio more or less risky than the two stocks? Why? this is the entire question...
1. Expected return and standard deviation Aa Aa Wilson holds a two-stock portfolio that invests equally in Kelevra Industries and Old Glory Insurance Company (50% of his portfolio is in each stock). Each stock's expected return for the next year will depend on market conditions. The stocks' expected returns if there are poor, average, or great market conditions are shown below State of Probability of Kelevra Old Glory Economy State of Economy Industries Insurance Co Poor Average Great 0.25 0.50...
Q Search this course Risk and Rates of Return Tyler owns a two-stock portfolio that invests in Falcon Freight Company (FF) and Pheasant Pharmaceuticals (PP). Three-quarters of Tyler's portfolio value consists of FF's shares, and the balance consists of PP's shares. Each stock's expected return for the next year will depend on forecasted market conditions. The expected returns from the stocks in different market conditions are detailed in the following table: Market Condition Probability of Occurrence Falcon Freight Pheasant Pharmaceuticals...
2. Statistical measures of stand-alone risk Remember, the expected value of a probability distribution is a statistical measure of the average (mean) value expected to occur during all possible circumstances. To compute an asset's expected return under a range of possible circumstances (or states of nature), multiply the anticipated return expected to result during each state of nature by its probability of occurrence. Consider the following case: Tyler owns a two-stock portfolio that invests in Blue Llama Mining Company (BLM)...
Dominic owns a two-stock portfolio that invests in Blue Llama Mining Company (BLM) and Hungry Whale Electronics (HWE). Three-quarters of Dominic's portfolio value consists of BLM's shares, and the balance consists of HWE's shares. Each stock's expected return for the next year will depend on forecasted market conditions. The expected returns from the stocks in different market conditions are detailed in the following table: Market Condition Probability of Occurrence Blue Llama Mining Hungry Whale Electronics Strong Normal Weak 25% 45%...
Portfolio return and standard deviation Personal Finance Problem Jamie Wong is thinking of building an investment portfolio containing two stocks, Land M. Stock L will represent 65% of the dollar value of the porto, stock M will count for the other 35%. The historical returns over the next 6 years, 2013 - 2018, for each of these stocks are shown in the following table a. Calculate the actual portfolio return for each of the years. b. Calculate the expected value...