Following are three economic states, their likelihoods, and the potential returns: Probability Return 0.25 35% Economic State Fast growth Slow growth Recession 2 -18 0.45 0.30 Determine the standard deviation of the expected return. (Do not round intermediate calculations. decimal places.)
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- 11.6 Calculating Returns and Standard Deviations Based on the following information, calculate the expected return and standard deviation: State of Economy Probability of SE Rate of Return If State Occurs Depression .15 -.148 Recession .30 .031 Normal .45 .162 Boom .10 .348Q25 Following are three economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast growth 0.3 40 % Slow growth 0.4 10 Recession 0.3 –25 Determine the standard deviation of the expected return. (Do not round intermediate calculations and round your answer to 2 decimal places.) STANDARD DEVIATION. %Q2 Following are four economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast growth 0.30 60 % Slow growth 0.50 13 Recession 0.15 –15 Depression 0.05 -45 Compute the expected return and standard deviation. (Round your answers to 2 decimal places.) EXPECTED RETURN % STANDARD DEVIATION. %
- 470 - 35 you have concluded that the following relationships are possible next year: economic status probability rate of return weak economy .15 -5% static economy .6 5% strong economy .25 15% What is the standard deviation of the rate of return for the one year period? a. .65 % b. 1.45% c. 4% d. 6.25% e. 6.4%Computer the expected return given these three economic states, their likelihoods, and the potential returns. Economic State Probability Return Fast Growth 0.40 25% Slow Growth 0.55 12% Recession 0.05 -50% Multiple Choice ___ -4.3 percent ___ 14.1 percent ___ 19.1 percent ___ 29.0 percentH3. 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
- Question content area top Part 1 (Related to Checkpoint 8.3) (CAPM and expected returns) a. Given the following holding-period returns, LOADING... Month Sugita Corp. Market 1 2.4 % 1.0 % 2 −1.0 2.0 3 0.0 3.0 4 0.0 0.0 5 7.0 7.0 6 7.0 1.0 , compute the average returns and the standard deviations for the Sugita Corporation and for the market. b. If Sugita's beta is 1.84 and the risk-free rate is 6 percent, what would be an expected return for an investor owning Sugita? (Note: Because the preceding returns are based on monthly data, you will need to annualize the returns to make them comparable with the risk-free rate. For simplicity, you can convert from monthly to yearly returns by multiplying the average monthly returns by 12.) c. How does Sugita's historical average return compare with the return you should expect based on the Capital Asset…Problem 13-10 Returns and Standard Deviations [LO1] Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom .15 .37 .47 .27 Good .45 .22 .18 .11 Poor .35 −.04 −.07 −.05 Bust .05 −.18 −.22 −.08 a. Your portfolio is invested 20 percent each in A and C, and 60 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) b-2. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)15 [Question text] Based on the following information, what is the expected return for the following stock? State of Economy Probability of State of Economy Rate of Return if State Occurs Boom 0.06 -6% Normal 0.74 7% Recession 0.20 18% Select one: A. 8.80 percent B. 8.23 percent C. 8.53 percent D. 8.42 percent
- Question 31 RWJ 9-8 MC Given the forecast cash flows of the Covina Donuts, what is the profitability index for assuming a discount rate of 14.50? Year Cash Flow 0 -$46,500 1 $12,200 2 $38,400 3 $11,300 Group of answer choices 0.97 1.06 0.93 1.02 Question 32 RWJ 9-1 MCMaria is examining a graph that shows the NPVs of a technology project against different required rates of return. What is this graph called? Group of answer choices Project return vs risk profile Project Rate of return profile IRR profile NPV profileState of the Economy Probability Market Return Investment ReturnExpansion 0.30 40% 60%Normal 0.50 10% 25%Recession 0.20 -15% -40% Compute the correlation between the market the investment return(s)INV 2 -1c You are considering an investment in a portfolio P with the following expected returns in three different states of nature: Recession Steady Expansion Probability 0.10 0.55 0.35 Return on P -15% 20% 40% The risk-free rate is currently 4%, and the market portfolio M has an expected return of 16% and standard deviation of 20%, and its correlation with P is .7. c. Does portfolio P have a positive or negative alpha relative to its required return given its level of risk? Would you characterize P as a buy or sell, and why?