The higher the standard deviation of returns on a security, the _____ the expected rate of...
The higher the standard deviation of returns on a security, the _____ the expected rate of return and the _____ the risk.
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Homework Answers
Option 4 is correct
You cannot determine anything about the expected date of return from the standard deviation.
Standard deviation does not have any relation with expected return.
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The higher the standard deviation of returns on a security, the
_____ the expected rate of...
QUESTION 28 The expected returns, standard deviation, and coefficient variation of Stocks A and B are...
QUESTION 28 The expected returns, standard deviation, and coefficient variation of Stocks A and B are given below. If you are risk adverse investor, which stock will you buy? | Stocks | Expected Return Std. Deviation Coefficient Variation, CV A 15% 4% 0.27 B 12% 3% 0.25 O Stock A since expected return is higher Stock B since standard deviation is lower O Stock A since coefficient variation is higher Stock B since coefficient variation is lower O Need additional...
The wider the dispersion of returns on a stock, the: higher the standard deviation. lower the...
The wider the dispersion of returns on a stock, the: higher the standard deviation. lower the variance. lower the real rate of return. lower the expected rate of return.
Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock...
Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y has a 12.0% expected return, a beta coefficient of 1.1, and a 30.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CVx = CVy = Which stock is riskier for a diversified investor? For...
a. Calculate the expected return for each security. b. Calculate the standard deviation of returns for...
a. Calculate the expected return for each security.
b. Calculate the standard deviation of returns for each
security.
c. Compare Stock A with Stocks B and C. Is Stock A preferred
over the others?
d. Using your result in parts a and b, compute the following
probabilities:
Stock A makes a return more than 18.9%
Stock B makes a return less than 1.3%
Stock C makes a return between 6.1% and 16.1%
2) You are considering the...
The expected return of Security A is 12 percent with a standard deviation of 15 percent....
The expected return of Security A is 12 percent with a standard deviation of 15 percent. The expected return of Security B is 9 percent with a standard deviation of 10 percent. Securities A and B have a correlation of 0.4. The market return is 11 percent with a standard deviation of 13 percent and the risk-free rate is 4 percent. What is the Sharpe ratio of a portfolio if 35 percent of the portfolio is in Security A and...
Stock A has an expected return of 7%, a standard deviation of expected returns of 35%,...
Stock A has an expected return of 7%, a
standard deviation of expected returns of 35%, a correlation
coefficient with the market of -0.3, and a beta coefficient of
-0.5. Stock B has an expected return of 12% a standard deviation of
returns of 10%, a 0.7 correlation with the market, and a beta
coefficient of 1.0. Which security is riskier? Why?
1. Stock A has an expected return of 7%, a standard deviation of expected returns of 35%, a...
6. Calculating a beta coefficient for a single stock Suppose that the standard deviation of returns...
6. Calculating a beta coefficient for a single stock Suppose that the standard deviation of returns for a single stock A IS A = 25%, and the standard deviation of the market return is on = 15%. If the correlation between stock A and the market is PAM - 0.6, then the stock's beta is prns against the market returns will equal the true value of Is it reasonable to expect that the beta value estimated via the regression of...
true or false: the standard error of estimate of the expected return is higher than the standard deviation of returns.
true or false: the standard error of estimate of the expected return is higher than the standard deviation of returns.
QUESTION 4 You are given the following data about expected returns on a Bank security on...
QUESTION 4 You are given the following data about expected returns on a Bank security on the LUSE where different states of the economy have the same probability of occurrence: State Return Strong growth 7.5% Normal growth 5.0% Weak growth 1.5% Recession -2.5% Required: Compute and fully interpret the following for the investment: The Expected return for the security. [5 Marks] The volatility of the security returns using the standard deviation. [6 Marks] The Sharpe ratio of...
Stock A has an expected return of 7%, a standard deviation of expected returns at 35%,...
Stock A has an expected return of 7%, a standard deviation of expected returns at 35%, a correlation coefficient with the market of -.3, and a beta coefficient of -.5. Stock B has an expected return of 12%, a standard deviation of 10%, and a .7 correlation with the market, and a beta coefficient of 1.0 . Which security is riskier? why?
QUESTION 28 The expected returns, standard deviation, and coefficient variation of Stocks A and B are given below. If you are risk adverse investor, which stock will you buy? | Stocks | Expected Return Std. Deviation Coefficient Variation, CV A 15% 4% 0.27 B 12% 3% 0.25 O Stock A since expected return is higher Stock B since standard deviation is lower O Stock A since coefficient variation is higher Stock B since coefficient variation is lower O Need additional...
a. Calculate the expected return for each security.
b. Calculate the standard deviation of returns for each
security.
c. Compare Stock A with Stocks B and C. Is Stock A preferred
over the others?
d. Using your result in parts a and b, compute the following
probabilities:
Stock A makes a return more than 18.9%
Stock B makes a return less than 1.3%
Stock C makes a return between 6.1% and 16.1%
2) You are considering the...
Stock A has an expected return of 7%, a
standard deviation of expected returns of 35%, a correlation
coefficient with the market of -0.3, and a beta coefficient of
-0.5. Stock B has an expected return of 12% a standard deviation of
returns of 10%, a 0.7 correlation with the market, and a beta
coefficient of 1.0. Which security is riskier? Why?
1. Stock A has an expected return of 7%, a standard deviation of expected returns of 35%, a...
6. Calculating a beta coefficient for a single stock Suppose that the standard deviation of returns for a single stock A IS A = 25%, and the standard deviation of the market return is on = 15%. If the correlation between stock A and the market is PAM - 0.6, then the stock's beta is prns against the market returns will equal the true value of Is it reasonable to expect that the beta value estimated via the regression of...
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