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In the following year, there is a 10% chance of a bear market, a 20% chance of a bull market, and a 70% chance of
In the following year, there is a 10% chance of a bear market, a 20% chance of a bull market, and a 70% chance of a neutral market. Debt will return -2%, 4%, and 4% in the bear, bull and neutral market, respectively. Equity will return -15%6, 1596, and 8% in the bear, bull and neutral market, respectively. What is the expected return of debt in %6? (round to 1 decimal place) What is the volatility of equity in %?(round to 1 decimal place) What is the covariance of debt and equity? (leave as a decimal: round to 5 decimal places) What is the correlation of debt and equity? (leave as a decimal; round to 3 decimal places) What is the expected return of a risky portfolio made up of 8096 bonds and 20% stock? (units of %; round to 2 decimal places) What is the volatility of a risky portfolio made up of 80% bonds and 20% stock? (units of 96; round to 1 decimal places) If the risk-free rate was 2.3%, What is the Sharpe ratio of the risky portfolio made up of 80% bonds and 20% stock? (round to 2 decimal places)
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