Question
Please help me answer all of the questions. :) Thank you! 2. Use the following information on states of the economy and stock returns to
Please help me answer all of the questions. :) Thank you!
2.
Use the following information on states of the economy and stock returns to calculate the standard deviation of returns.
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
| State of Economy | Probability of State of Economy | Security Return if State Occurs |
|---|---|---|
| Recession | 0.20 | 9.00% |
| Normal | 0.50 | 15.00 |
| Boom | 0.30 | 24.00 |
Standard deviation __________%
3.
Use the following information on states of the economy and stock returns to calculate the expected return and the standard deviation of returns. Assume that all three states are equally likely.
Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
| State of Economy | Security Return if State Occurs |
|---|---|
| Recession | 10.00% |
| Normal | 7.00 |
| Boom | 17.00 |
Expected return: 4.67%
Standard deviation: _______%
4. 
| State of Economy | Probability of State of Economy | Security Returns if State Occurs | |
|---|---|---|---|
| Roll | Ross | ||
| Bust | 0.50 | 12% | 18% |
| Boom | 0.50 | 25 | 6 |
Calculate the expected returns for Roll and Ross by filling in the following table:
Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Calculate the product using the decimal value of the probability and the percentage value of the return. Input all your answers as a percent rounded to 2 decimal places.
5. 
| State of Economy | Probability of State of Economy | Security Returns if State Occurs | |
|---|---|---|---|
| Roll | Ross | ||
| Bust | 0.30 | -11% | 12% |
| Boom | 0.70 | 29% | 5% |
Calculate the expected return on a portfolio of 50 percent Roll and 50 percent Ross by filling in the following table:
Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
7. 
Consider the following information:
| State of Economy | Probability of State of Economy | Rate of Return if State Occurs | ||
|---|---|---|---|---|
| Stock A | Stock B | Stock C | ||
| Boom | 0.25 | 0.19 | 0.35 | 0.28 |
| Good | 0.30 | 0.14 | 0.13 | 0.14 |
| Poor | 0.10 | 0.00 | 0.10 | 0.05 |
| Bust | 0.35 | 0.20 | 0.28 | 0.13 |
a. Your portfolio is invested 35 percent each in Stocks A and C and 30 percent in Stock B. What is the expected return of the portfolio?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
b-1. What is the variance of this portfolio?
Note: Do not round intermediate calculations. Round your answer to 5 decimal places.
b-2. What is the standard deviation?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Use the following information on states of the economy and stock returns to calculate the standard deviation of returns. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Assume you are the manager of a shop that assembles power tools. You have just received an order for 52 chain saws, which are to be shipped at the start of week 8 . Pertinent information on the saws follows: Develop the material requirements plan for component E using lot-for-lot ordering for all items. (Leave no cells blank - be certain to enter " 0 " wherever required.) Problem 11-4 Expected Returns (LO1, CFA1) Calculate the expected returns for Roll and Ross by filling in the following table: Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Calculate the product using the decimal value of the probability and the percentage value of the return. Input all your answers as a percent rounded to 2 decimal places. Problem 11-6 Portfolio Expected Returns (LO2, CFA2) Calculate the expected return on a portfolio of 50 percent Roll and 50 percent Ross by filling in the following table: Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Problem 11-9 Returns and Standard Deviations (LO2, CFA4) Consider the following information: a. Your portfolio is invested 35 percent each in Stocks A and C and 30 percent in Stock B. What is the expected return of the portfolio? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. b-1. What is the variance of this portfolio? Note: Do not round intermediate calculations. Round your answer to 5 decimal places. b-2. What is the standard deviation? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places
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Contemporary Financial Management
Authors: R. Charles Moyer, William J. Kretlow, James R. Mcguigan
7th Edition
0538877766, 9780538877763
