Question
Risk and Rates of Return (CH#8) #5 Intro You've collected the following historical rates of return for stocks A and B: Year (t) r A,t
Risk and Rates of Return (CH#8) #5
Intro
You've collected the following historical rates of return for stocks A and B:
Year (t) | rA,t | rB,t |
---|---|---|
2016 | 0.02 | 0.01 |
2015 | 0.08 | 0.05 |
2014 | 0.13 | 0.07 |
Attempt 2/5 for 10 pts.
Part 1
What was the average annual return for stock A (prev ans : 0.06)
Attempt 2/5 for 10 pts.
Part 2
What was the average annual return for stock B? (prev ans : 0.06)
Attempt 1/5 for 10 pts.
Part 3
What was the standard deviation of returns for stock A?
Attempt 1/5 for 10 pts.
Part 4
What was the standard deviation of returns for stock B?
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Risk and Rates of Return (CH#8) #10
Intro
The table below shows the expected rates of return for three stocks and their weights in some portfolio:
Stock A | Stock B | Stock C | ||
---|---|---|---|---|
Portfolio weights | 0.4 | 0.2 | 0.4 | |
State | Probability | Expected returns | ||
Recession | 0.3 | 0.08 | 0.03 | 0.14 |
Boom | 0.7 | 0.13 | 0.05 | 0.15 |
Attempt 2/5 for 10 pts.
Part 1
What is the portfolio return during a recession?
Attempt 1/5 for 10 pts.
Part 2
What is the expected portfolio return?
Attempt 1/5 for 10 pts.
Part 3
What is the standard deviation of the portfolio returns?
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