Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please sold a-2, and c. thanks. You are given the following information: State of Return on Return on Stock A Stock B Economy Bear .119

image text in transcribed

please sold a-2, and c. thanks.

You are given the following information: State of Return on Return on Stock A Stock B Economy Bear .119 -062 Normal 098 .165 Bull .090 250 Assume each state of the economy is equally likely to happen. a. Calculate the expected return of each stock. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of each stock. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the covariance between the returns of the two stocks? (A negative answer should be indicated by a minus sign, Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616.) d. What is the correlation between the returns of the two stocks? (A negative answer should be indicated by a minus sign, Do not round intermediate calculations and round your answer to 4 decimal places, e.g., .1616.) Answer is not complete. a. 10.22 % % b. 1.22 % Stock A Stock B Stock A Stock B Covariance Correlation 13.17 % C. d. -1.0024

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Investment The Study Of An Economic Aggregate

Authors: Philip J. Lund

1st Edition

0444851380,1483256901

More Books

Students also viewed these Finance questions