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(14 pts) The Grunewald Company has developed the following data regarding the rates of return on a potential stock and the market: State of the
- (14 pts) The Grunewald Company has developed the following data regarding the rates of return on a potential stock and the market:
State of the Economy of Each Rates of Return If State occurs
|
| State Occuring |
| Deep Recession | .20 |
| Mild Recession | .20 |
| Average | .20 |
| Mild boom | .20 |
| Strong boom | .20 |
| Stock A | Market |
| (20%) | (30%) |
| 10 | 5 |
| 15 | 20 |
| 20 | 25 |
| 25 | 30 |
- Caculate the standard deviations for the stock A and the Market.
- Calculate the betas for the stock A and the market
- Calculate the probability that stock As return is negative, that is P (K<0)=?
- Calculate the probability that stock As return is between 0 and 15%, that is P (0
- Calculate the Covariance and correlation coefficient between stock A and the market.
PLEASE: If possible, do step by step with the Financial calculator HP10BII
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