Question
1. Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Recession 0.35 9.0% 5.0% Normal 0.40 6.0% 7.5% Boom 0.25 28.0% 6.5%
1.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | 9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | 6.5% |
Determine the mean return for the stock fund. Use the excel spreadsheet template.
2.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | 9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | 6.5% |
Determine the mean return for the bond fund.
3.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | 9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | 6.5% |
Find the standard deviation of returns on the stock fund.
4.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | 9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | 6.5% |
Find the standard deviation of returns bond fund.
5.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | 9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | 6.5% |
Determine the mean return on a combined portfolio (stocks s and bonds b) that consists of 50% in the stock fund and 50% in the bond fund.
6.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | 9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | 6.5% |
Calculate the standard deviation of the combined portfolio.
7.
| Stock Fund | Bond Fund | ||
| Scenario | Probability | Rate of Return | Rate of Return |
| Recession | 0.35 | 9.0% | 5.0% |
| Normal | 0.40 | 6.0% | 7.5% |
| Boom | 0.25 | 28.0% | 6.5% |
Calculate the correlation of the combined portfolio.
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Complete Business Statistics
Authors: Amir Aczel, Jayavel Sounderpandian
7th Edition
9780071077903, 73373605, 71077901, 9780073373607, 77239695, 978-0077239695
