Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose we have the following discrete probability distribution of returns on three different assets: government bonds, ordinary shares of company A, and ordinary shares of

Suppose we have the following discrete probability distribution of returns on three different assets: government bonds, ordinary shares of company A, and ordinary shares of company B.

% Returns for a period (e.g year)

Economic Condition

Probability

Bonds

Company A shares

Company B shares

Very poor

Poor

Average

Good

0.1

0.2

0.4

0.3

1.0

9

8

6

4

-2

3

8

11

-3

2

9

13

1) Calculate the expected returns for these assets. (6.1%, 6.9%, 7.6%)

2) Calculate the standard deviations for these assets. (Approximately 1.7%, 4.06%, 5.2%)

3) Calculate the coefficients of variation for these asset. (0.279, 0.588, 0.684)

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

Offshore Finance And State Power

Authors: Andrea Binder

1st Edition

0192870122, 978-0192870124

More Books

Students also viewed these Finance questions

Question

2. Why is estimation an important type of inference?

Answered: 1 week ago

Question

Types of cultural maps ?

Answered: 1 week ago

Question

Discuss the various types of leasing.

Answered: 1 week ago

Question

Define the term "Leasing"

Answered: 1 week ago

Question

What do you mean by Dividend ?

Answered: 1 week ago