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?

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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?

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------