Question
The table shows the return over a 6 month period for the market and for the stock XYZ itd. Month Market Return XYZ LTD stock
The table shows the return over a 6 month period for the market and for the stock XYZ itd.
Month | Market Return | XYZ LTD stock return |
1 | -0.08 | -0.11 |
2 | 0.05 | 0.07 |
3 | 0.11 | 0.15 |
4 | -0.06 | -0.09 |
5 | 0.08 | 0.02 |
6 | 0.03 | 0.05 |
1. Using historical return, calculate the expected return and standard deviation of XYZ and the market
2. Which one is a better investment based on expected return and risk alone?
3. If the correlation between XYZ and the market is 0.935 what is the beta of the market? What is beta of XYZ ltd?
4. Risk can be measured by the standard deviation and beta, explain the differences between these two measures. Explains the differences between beta and standard deviation.
Step by Step Solution
3.49 Rating (162 Votes )
There are 3 Steps involved in it
Step: 1
1 Using the historical returns we can calculate the expected return and standard deviation of XYZ an...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get StartedRecommended Textbook for
Understanding Basic Statistics
Authors: Charles Henry Brase, Corrinne Pellillo Brase
6th Edition
978-1133525097, 1133525091, 1111827028, 978-1133110316, 1133110312, 978-1111827021
Students also viewed these Finance questions
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
View Answer in SolutionInn App