MGMT2023 - Financial Management 1- UWI OPEN CAMPUS

In the picture Consider the following information about the various states of economy and the returns of various investment alternatives for each scenario. Answer the questions that follow.

% Return on T-Bills, Stocks and Market Index T- State of the Economy Probability Pay- Rubber- Market Phillips Bills up made Index Recession 0.2 7 -22 28 10 -13 Below Average 0.1 7 -2 14.7 -10 Average 0.3 20 0 7 15 Above Average 0.3 7 35 -10 45 29 Boom 0.1 7 50 -20 30 43 Mean Standard Deviation Coefficient of Variation Covariance with MP Correlation with Market Index Beta CAPM Req. Return Valuation (Overvalued Undervalued/Fairly Valued) Nature of stock (Aggressive/Defensive)