{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-05-27T22:07:19-04:00", "answer_date": "2024-05-27 22:07:19", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "1803397", "url": "\/study-help\/questions\/wwwwww-stocks-a-and-b-have-the-following-probability-distributions-1803397", "question_creation_date_js": "2024-05-27T22:07:19-04:00", "question_creation_date": "May 27, 2024 10:07 PM", "meta_title": "[Solved] wwwwww Stocks A and B have the following | SolutionInn", "meta_description": "Answer of - wwwwww Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (13 | SolutionInn", "meta_keywords": "wwwwww,stocks,probability,distributions,expected,future,returns,0.1,13%,26%,0.2,5", "question_title_h1": " wwwwww Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (13%) (26%) 0.2 5 0 0.4", "question_title": " wwwwww Stocks A and B have the following probability distributions of", "question_title_for_js_snippet": "wwwwww Stocks A and B have the following probability distributions of expected future returns Probability A B 0 1 (13 ) (26 ) 0 2 5 0 0 4 16 19 0 2 18 0 1 341 26 47 a Calculate the expected rate of return, FB, for Stock B (FA 13 10 ) Do not round intermediate calculations Round your answer to two decimal places b Calculate the standard deviation of expected returns, GA, for Stock A (on 18 60 ) Do not round intermediate calculations Round your answer to two decimal places Now calculate the coefficient of variation for Stock B Do not round intermediate calculations Round your answer to two decimal places Is it possible that most investors might regard Stock B as being less risky than Stock A 1 If Stock B is more highly correlated with the market than A, then it might have the same beta as Stock A, and hence be just as risky in a portfolio sense II If Stock B is less highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense III If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense IV If Stock B is more highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be less risky in a portfolio sense V If Stock B is more highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense Select c Assume the risk free rate is 3 5 What are the Sharpe ratios for Stocks A and B Do not round intermediate calculations Round your answers to four decimal places Stock A Stock B ", "question_description": "\"image", "transcribed_text": "wwwwww Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (13%) (26%) 0.2 5 0 0.4 16 19 0.2 18 0.1 341 26 47 a. Calculate the expected rate of return, FB, for Stock B (FA 13.10 %.) Do not round intermediate calculations. Round your answer to two decimal places. % b. Calculate the standard deviation of expected returns, GA, for Stock A (on - 18.60%.) Do not round intermediate calculations. Round your answer to two decimal places.. % Now calculate the coefficient of variation for Stock B. Do not round intermediate calculations. Round your answer to two decimal places. Is it possible that most investors might regard Stock B as being less risky than Stock A? 1. If Stock B is more highly correlated with the market than A, then it might have the same beta as Stock A, and hence be just as risky in a portfolio sense. II. If Stock B is less highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense. III. If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense. IV. If Stock B is more highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be less risky in a portfolio sense. V. If Stock B is more highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense. -Select- c. Assume the risk-free rate is 3.5%. What are the Sharpe ratios for Stocks A and B? Do not round intermediate calculations. Round your answers to four decimal places. Stock A: Stock B:", "related_book": { "title": "Financial and managerial accounting", "isbn": "111800423X, 9781118233443, 1118016114, 9781118004234, 1118233441, 978-1118016114", "edition": "1st edition", "authors": "Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/221.jpg", "uri": "\/textbooks\/financial-and-managerial-accounting-1st-edition-221", "see_more_uri": "" }, "free_related_book": { "isbn": "B08NFWX2W3", "uri": "\/textbooks\/metal-adjustable-pencil-extender-lengthener-holder5-pcs-adorable-quality-and-practicaldurable-b08nfwx2w3-175429", "name": "Metal Adjustable Pencil Extender Lengthener Holder5 Pcs Adorable Quality And Practicaldurable", "edition": "" }, "question_posted": "2024-05-27 22:07:19", "see_more_questions_link": "\/study-help\/questions\/business-finance-2024-September-21", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/a-circular-post-a-rectangular-post-and-a-post-of", "description": "A circular post, a rectangular post, and a post of cruciform cross section are each compressed by loads that produce a resultant force P acting at the edge of the cross section (see figure). The...", "stars": 3 }, { "url": "\/kazaam-company-a-merchandiser-recently-completed-its-calendaryear-2011-operations", "description": "Kazaam Company, a merchandiser, recently completed its calendar-year 2011 operations. For the year, (1) All sales are credit sales, (2) All credits to Accounts Receivable reflect cash receipts from...", "stars": 3 }, { "url": "\/study-help\/public-accounting\/4-a-the-conversion-costs-direct-labor-and-factory-overhead-1936071", "description": "=+4. A The conversion costs (direct labor and factory overhead) totaling $48,750 are divided by the number of equivalent units (4,875) to determine the unit conversion cost of $10 (answer A).", "stars": 3 }, { "url": "\/study-help\/business-statistics-in-practice\/6-ultimately-how-well-can-you-predict-charges-consider-not-1982105", "description": "=+6. Ultimately, how well can you predict Charges? Consider not just the R2 , but also the se. (Be", "stars": 3 }, { "url": "\/the-following-costs-result-from-the-production-and-sale-of", "description": "The following costs result from the production and sale of 12,000 CD sets manufactured by Gilmore Company for the year ended December 31, 2013. The CD sets sell for $ 18 each. The company has a 25%...", "stars": 3 }, { "url": "\/study-help\/questions\/si-todo-lo-dems-permanece-constante-una-disminucin-en-el-9735635", "description": "Si todo lo dems permanece constante, una disminucin en el costo variable por unidad causara que el punto de equilibrio (donde el ingreso neto es cero): No se puede decir sin ms informacin Aumentar...", "stars": 3 }, { "url": "\/study-help\/questions\/extend-3-x-3-x-x2-to-a-basis-for-2205993", "description": "Extend 3 x 3 x x2 to a basis for P Enter your answers as a comma separated list 2", "stars": 3 }, { "url": "\/study-help\/questions\/the-following-cost-behavior-pattern-describes-anticipated-manufacturing-overhead-costs-1862433", "description": "The following cost behavior pattern describes anticipated manufacturing overhead costs for 2019: $297,500+ $9.0\/unit. During the year, 35,000 units were produced and 32,750 units were sold. Required:...", "stars": 3 }, { "url": "\/study-help\/questions\/blue-spruce-valley-limited-produces-wine-certain-vintage-wines-take-1863504", "description": "Blue Spruce Valley Limited produces wine. Certain vintage wines take more than one year to age. The company has borrowed funds to cover the costs of this aging process. The company meets the interest...", "stars": 3 }, { "url": "\/study-help\/questions\/waterways-corporation-is-preparing-its-budget-for-the-coming-year-1864008", "description": "Waterways Corporation is preparing its budget for the coming year, 2022. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in...", "stars": 3 }, { "url": "\/study-help\/questions\/question-10-of-13-you-noticed-that-a-fast-food-1867522", "description": "Question 10 of 13 You noticed that a fast food restaurant's operating cycle is 30 days. Would this suggest the restaurant is selling food beyond its expiration date? Select an answer: No, because the...", "stars": 3 }, { "url": "\/study-help\/questions\/on-31-december-20x0-the-inventory-of-v-was-completely-1876592", "description": "On 31 December 20X0 the inventory of V was completely destroyed by fire. The following information is available: Inventory at 1 December 20X0 at cost GHS28,400. Purchases for December 20X0 GHS49,600....", "stars": 3 }, { "url": "\/study-help\/questions\/the-stock-price-of-google-is-560-you-have-10000-8349346", "description": "The stock price of Google is $560. You have $10,000 to invest. The monthly interest rate is 0.8%. Part 1 You think the stock price will go down soon, and want to trade 20 shares. What should you do?...", "stars": 3 }, { "url": "\/the-cost-curve-for-the-city-water-supply-is-cq", "description": "The cost curve for the city water supply is C(Q) = 16 + 1\/4 Q2, where Q is the amount of water supplied and C(Q) is the cost of providing Q acre-feet of water. (An acre-foot is the amount of water...", "stars": 3 }, { "url": "\/study-help\/business-statistics\/why-is-bayess-rule-unnecessary-for-finding-p1b0a2-if-events-1660586", "description": "Why is Bayess rule unnecessary for finding P1B0A2 if events A and B are mutually exclusive? LO5", "stars": 3 }, { "url": "\/study-help\/business-statistics\/going-online-for-health-information-a-cyberchondriac-is-defined-as-1660576", "description": "Going online for health information. A cyberchondriac is defined as a person who regularly searches the Web for health care information. A Harris Poll surveyed 1,010 U.S. adults by telephone and...", "stars": 3 }, { "url": "\/study-help\/business-statistics\/electric-wheelchairs-are-difficult-to-maneuver-for-many-disabled-people-1660589", "description": "Electric wheelchairs are difficult to maneuver for many disabled people. In a paper presented at the 1st International Workshop on Advances in Service Robotics (Mar. 2003), researchers applied Bayess...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/joan-newman-has-collected-the-following-data-relative-to-housing-1803396", "next": "\/study-help\/questions\/required-information-the-following-information-applies-to-the-questions-displayed-1803398" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": " wwwwww Stocks A and B have the following probability distributions of", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/wwwwww-stocks-a-and-b-have-the-following-probability-distributions-1803397" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } }": "1" } }