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a financial analyst you are trying to put together a report about three different bonds. One portion of the report requires you to estimate the
a financial analyst you are trying to put together a report about three different bonds. One portion of the report requires you to estimate the expected return and standard deviation of each bond.
Which bond has the highest expected return?
Which bond has the riskiest? [Hint: You must use the probability model to compute the expected risk]
Probability | Yield for Bond X | Yield for Bond Y | Yield for Bond Z |
0.10 | 12% | 14% | 7% |
0.20 | 4% | 3% | 9% |
0.30 | 23% | 7% | 15% |
0.05 | 6% | -20% | 30% |
0.15 | 8% | 5% | 2% |
0.09 | 1% | -12% | 0.1% |
0.11 | 9% | 2% | 10% |
In excel. How do you know which bond is risker than the other?
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