5. Given the following probability distributions for Panther Tech Inc. (PT) State of Economy Probability Exceptional 15% Average 60% Recession 25% What are the expected return and the standard deviation for PT? b) between PT returns 55% 12% -16% Assuming a continuous distribution, approximately 95.46% of the time, the return for PT will fall and

5. Given the following probability distributions for Panther Tech Inc. (PT) State of Economy Probability Exceptional 15% Average 60% Recession 25% What are the expected return and the standard deviation for PT? b) between PT returns 55% 12% -16% Assuming a continuous distribution, approximately 95.46% of the time, the return for PT will fall and

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

H3. Compute the standard deviation of the expected return given these three economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast Growth 0.2 30% Slow Growth 0.5 6% Recession 0.3 −2% Please show proper step by step calculation
.An analyst believes that economic conditions during the next year will either be strong, normal, or weak, and she thinks that the Corrigan Company's returns will have the following probability distribution. Conditions Probability (%) Return (%) Strong 30 30 Normal 40 15 Weak 30 -10 What is Corrigan’s expected return? What is Corrigan’s standard deviation of returns?
You have the following stock with expected returns given the different economic outcomes. What is the overall standard deviation of returns? Probability Economic state Recession Normal Boom 25% I 50% 25% Return -5% 8% 25%
Compute the expected return given these three economic states, their likelihoods, and the potential returns: (Round your answer to 2 decimal places.) Economic State Probability Return Fast growth 0.20 30 % Slow growth 0.58 5 Recession 0.22 –35 Expected return: ____.__%
Consider the following information: State of Probability of Portfolio Return Economy State of Economy If State Occurs Recession <- Boom 21 .79 Expected return Calculate the expected return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 11 .21 %
What is the risk premium for the following returns if the risk-free rate is 4%? State Probability Return Boom .20 .75 Good .55 .25 Recession .15 -.10 Depression .10 -.20 0.3325 O 0.1525 0.0525 0.1825 0.2225
Consider the following returns and states of the economy for TZ.Com.: Economy Probability Return Weak 15% 2% Normal 50% 8% Strong 35% 15% What is the standard deviation of TZ's returns?
Consider the following information: State ofEconomy Probability of Stateof Economy Rate of Returnif State Occurs Recession .24 –.10 Normal .46 .12 Boom .30 .31 Calculate the expected return.
Consider the following information: State ofEconomy Probability ofState of Economy Rate of Returnif State Occurs Recession .37 −.11 Boom .63 .23 Calculate the expected return.
Assume that the economy can experience four possible states: high growth, normal growth, recession, or depression. For each of those states, you expect the following stock market returns for the coming year: State of the Economy High Growth Normal Growth Recession Depression Probability 0.2 0.6 0.15 0.05 Return +20% +8% -10% -30% In dollar terms, what is the value at risk (over a one-year horizon at a 5 percent probability) associated with a $1,000 investment? The value at risk: $
Consider the following information: State of Economy Recession Normal Boom Probability of State of Expected return Economy .17 .53 .30 Portfolio Return if State Occurs -.13 Calculate the expected return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % 14 .22
Consider the following information: State of Economy Recession Normal Boom Probability of State of Economy .22 .48 .30 Expected return Rate of Return if State Occurs Calculate the expected return. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decima % -.12 .14 .33

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS