Based on the following information, calculate the expected return and standard deviation for the two stocks: R
Question:
Based on the following information, calculate the expected return and standard deviation for the two stocks:
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
Transcribed Image Text:
R ate of Return if State Occurs State of Economy Recession Normal Boom Probability of State of Economy 30 .55 .15 Stock A 06 07 Stock B -.20 13 .33
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 80% (10 reviews)
Input area State Probability Stock A Stock B Recession 030 006 ...View the full answer
Answered By
JAPHETH KOGEI
Hi there. I'm here to assist you to score the highest marks on your assignments and homework. My areas of specialisation are:
Auditing, Financial Accounting, Macroeconomics, Monetary-economics, Business-administration, Advanced-accounting, Corporate Finance, Professional-accounting-ethics, Corporate governance, Financial-risk-analysis, Financial-budgeting, Corporate-social-responsibility, Statistics, Business management, logic, Critical thinking,
So, I look forward to helping you solve your academic problem.
I enjoy teaching and tutoring university and high school students. During my free time, I also read books on motivation, leadership, comedy, emotional intelligence, critical thinking, nature, human nature, innovation, persuasion, performance, negotiations, goals, power, time management, wealth, debates, sales, and finance. Additionally, I am a panellist on an FM radio program on Sunday mornings where we discuss current affairs.
I travel three times a year either to the USA, Europe and around Africa.
As a university student in the USA, I enjoyed interacting with people from different cultures and ethnic groups. Together with friends, we travelled widely in the USA and in Europe (UK, France, Denmark, Germany, Turkey, etc).
So, I look forward to tutoring you. I believe that it will be exciting to meet them.
3.00+
2+ Reviews
10+ Question Solved
Related Book For
Corporate Finance
ISBN: 978-0077861759
11th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
Question Posted:
Students also viewed these Corporate Finance questions
-
Calculate the expected return and standard deviation for an investment with the following probability distribution. Return (%) Probability (%) -10 20 5 20 10 20 17 30 26 10 Expected return Standard...
-
Calculate the expected return, variance, and standard deviation for the stocks in the table below. Product Demand Probability 20% 60% 20% Stock #1 30% 12% -10% Stock #2 2000 1490 -5% Stock #3 15% 10%...
-
The table below shows the expected return and standard deviation for two stocks. Is the pattern shown in the table possible? Stock Beta Std. Dev 1 1.5 22% 2 0.9 3590
-
Spencer Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Spencers policy is to maintain an ending inventory...
-
In its rest frame, a source emits light in a conical beam of width 45. In a frame moving towards the source at speed u, the beam width is 30. What is v?
-
On 1/1/2021, Green Ltd. borrowed $50,000 from XYZ Bank for 5 years at 4%. Equal principal and interest payments of $11,231 are due each December 31. Complete the amortization table provided (the last...
-
Scan the histogram from left to right, to identify candidate threshold values of the mean propensity for partitioning the test set into churners and non-churners. The goal is to select a set of...
-
Historical data show that customers who download music from a popular Web service spend approximately $ 26 per month, with a standard deviation of $ 4. Find the probability that a customer will spend...
-
prepare a budgeted income statement for 2 0 2 2
-
The Harriet Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs the hotel $30 per room in variable costs (cleaning, bathroom items, etc.) each night a room is occupied. For...
-
You have $10,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 13 percent and Stock Y with an expected return of 8.5 percent. If your goal is to create a...
-
Based on the following information, calculate the expected return and standard deviation: State of Probability of Rate of Return Economy State of Economy if State Occurs...
-
A special coal burner uses a stoichiometric mixture of coal and an oxygenargon mixture (1:1 mole ratio), with the reactants supplied at the reference conditions P 0 , T 0 . Find the adiabatic flame...
-
The following graph shows a market supply curve in orange and a market demand curve in blue. Suppose there is an increase in demand and an increase in supply. Adjust the following graph to reflect...
-
AICPA and PCAOB auditing standards address the confirmation of accounts receivables. Under the currently effective standards, what are the circumstances under which confirmation of accounts...
-
Maphitha Limited produces a single type of a product. The company uses an actual costing system. The following information has been taken from the company's production and sales records for the month...
-
Master Budget was made for annual sale of 100,000 units @10 per unit. Actual sales figures were 80,000 units with a sales revenues of 840,00. The standard cost sheet indicated a variable...
-
Sales of a product was estimated at 80,000 pieces annually with a rate of 6 pu. Its variable mfg. costs are 2.50 pu with S&D and general expenses related to product is 59,000 on annual basis. Its...
-
What do you mean by responsibility accounting?
-
What did Lennox gain by integrating their WMS, TMS, and labor management systems?
-
Cusic Industries had the following operating results for 2019: sales = $24,360; cost of goods sold = $17,600; depreciation expense = $3,400; interest expense = $860; dividends paid = $790. At the...
-
Consider the following abbreviated financial statements for Weston Enterprises: a. What is owners? equity for 2018 and 2019? b. What is the change in net working capital for 2019? c. In 2019, Weston...
-
Draw up an income statement and balance sheet for this company for 2018 and 2019. Use the following information for Ingersoll, Inc., for Problems 21 and 22. Assume the tax rate is 21 percent. 2019...
-
Suppose First Fidelity Bank engaged in the following transactions: (Click the icon to view the transactions.) Journalize the 2018 and 2019 transactions on First Fidelity's books. Explanations are not...
-
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash Accounts receivable Inventory Plant and equipment, net...
-
Supply costs at Coulthard Corporation's chain of gyms are listed below: March April May June July August September October November Client-Visits 11,666 11,462 11,994 13,900 11,726 11, 212 12,006...
Study smarter with the SolutionInn App