Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. You are given the following probability distribution of returns for stock J: A probability of .2 that the return will be 12%; a probability

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
1. You are given the following probability distribution of returns for stock J: A probability of .2 that the return will be 12%; a probability of .35 that the return will be 18%; a probability of .3 that the return will be-10%; and a probability of .15 that the return will be 10%. What is the expected return of this stock? What is the standard deviation rounded to the nearest whole number? 2. Given the following hypothetical returns of large companies and T-bil between 2007 and 2012. Please calculate the average return and standard deviation of both large companies YearLarge co. stock returnT-bill return 2007-14.69% 200826.47 2009 37.23 2010 23.93 2011 -7.16 2012 6.57 7.29% 7.99 5.87 5.07 5.45 7.64 3. Troy has a 2-stock portfolio with a total value of $100.000. $37.500 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42. What is his portfolio's beta

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Financial Management

Authors: James C. Van Horne

10th Edition

0138596875, 978-0138596873

More Books

Students also viewed these Finance questions