Question
State of market Probability HPR Boom .22 52.5% Normal growth .30 18.5 Recession .48 -17.5 Compute the expected return and standard deviation of the HPR
| State of market | Probability | HPR |
| Boom | .22 | 52.5% |
| Normal growth | .30 | 18.5 |
| Recession | .48 | -17.5 |
- Compute the expected return and standard deviation of the HPR
- Calculate the expected return and standard deviation of a complete portfolio invested 40% on risky assets. If risk free rate is 4%.
2-Suppose the nominal interest rate is 7% per year and the expected inflation rate is 3%. What is the real interest rate?
3- Calculate the geometric average for the following rates of return 10%, 15,20 ,-5, and 1%
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Case Approach To Financial Planning Bridging The Gap Between Theory And Practice
Authors: John E. Grable
3rd Edition
1945424028
