7. Calculating Returns and Variability. Using the following returns, 01 calculate the average returns, the variances, and the standard deviations for X and Y. Returns Year Y. 16% 36% -17 - 8 13 21 15 -15 24 39 12 3 45

Q: 7. Using the three-variance approach, what is the volume variance? b. P 2,640 F а. Р 13,260 U c.…

A: Note: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts…

Q: The Sharpe ratio is computed as the average: excess return divided by the variance of the returns )…

A: Sharpe ratio is the value that is obtained by dividing the equity risk premium by the standard…

Q: Use the following returns for X and Y. Returns Year X Y 1. 21.8% 26.4% 2. -16.8 -3.8 3. 9.8 28.4 4.…

A: Here, Note: Here, we are considering the given data as a sample data, hence applying the formula of…

Q: Which one of the following measures is relevant for assessing exposure to systematic risk?

A: Systematic Risk: It refers to the risk caused by factors that are not in the control of an…

Q: Given the following historical returns, what is the variance? Year Return 1 7 percent 3 percent 3.…

A: Return in year 1 (R1) = 7% R2 = 3% R3 = 19% R4 = -11% R5 = -1% Let R = Average return

Q: Assume the mean and standard deviation of sample returns are​ 8% and​ 10% respectively. Assuming…

A: Sample returns are 8% Standard deviation is 10% Returns are normally distributed To Find:…

Q: Consider the data scores 8, 9, 13, 20, and 25. Solve for the Range, Mean, Standard Deviation and…

A: The range, mean, standard deviation and variance are the terms used to analyse the nature of the…

Q: The variance and its square root, the standard deviation, are the most commonly used measures of…

A: Variance refers to the expectation of squared deviation of a random value from its arithmetic mean.…

Q: Use the following returns for X and Y.     Returns Year X Y 1     22.7 %       29.1 %   2   – 17.7…

A: Return means the amount received over the amount invested. Basically it shows the gain percentage or…

Q: Each day, a certain stock has an expected increase of $0.04 with variance of $0.10. By calculating,…

A: A stock is a sort of financial instrument that indicates the holder owns a share of the issuing…

Q: Returns             Year   X     y   1   17  %   20  % 2   20     32   3   11     15   4 – 7   – 18…

A: arithmetic average =sum of return/5 Arithmetic average =17+20+11-7+10/5=51/5=10.2 Arithmetic average…

Q: Calculate the correlation coefficient for the portfolio using the following information: Variance of…

A: The correlation coefficient is the measurement of the relationship between two variables and the…

Q: e measure of volatility is Select one: a. sigma. b. standard deviation.  c. sigma squared. d.…

A: Volatility is change in stock price in up and down. That is very important in option pricing.

Q: You are given the following information about 4 stocks: Variance-Covariance Matrix 3 0.0325 0.0125…

A: Weight in stock 1 (w1) = 0.25 Weight in stock 2 (w2) = 0.25 Weight in stock 3 (w3) = 0.25 Weight in…

Q: What is the variance of returns for Security ABC

A: In finance we use variance of returns as a measure of risk that is inherent in a stock or a…

Q: Returns Year Y 14 % 20 % 17 29 8. 15 - 10 - 1 19 10 Using the returns shown above, calculate the…

A: Arithmetic Average Return =R1 + R2 + ... + Rn/n Arithmetic Average Return of X Stock = 39%/5 = 7.80%…

Q: The covariance of returns between MSFT and AAPL is 0.0044. The standard deviation of the return of…

A:

Q: Total risk is measured by and systematic risk is measured by Beta; standard deviation. Standard…

A: There are two types of risks systematic risk and unsystematic risk

Q: What is the cost volume variance? * Sample format: 111,111 F or 111,111 U

A: Cost Volume Variance refers to the variance which arises when actual cost of goods sold  differs…

Q: Calculating Returns and Variability Using the following returns, calculate the arithmetic average…

A: Using excel standard deviation and variance function

Q: Returns Year Y 18 % 15 % 21 33 12 14 - 14 - 19 10 23 Using the returns shown above, calculate the…

A: Average Return is the return earned on investment. It is calculated by sum of returns by total no.…

Q: What is the standard deviation of the following distribution: Probability           Possible…

A: In finance, standard deviation is calculated to determine the degree of variation in a particular…

Q: Calculate the project's coefficient of variation. (Hint: Use the expected NPV.) Squared dev. Prob.…

A: Financial statements are statements which states the business activities performed by the company .…

Q: Calculate the coefficient of variation for a set of data with standard deviation of 4.2, number of…

A: The coefficient of variation is a ratio calculated by dividing the standard deviation by the mean.…

Q: According to mean-variance rule A. The expected return of X is at least equal to the expected return…

A: As per Mean Variance Rule, For same level of return, investor choose one with lower variance and for…

Q: Consider the following POPULATION of returns: 5%, -4%, -3%, and 12%. What is the standard deviation…

A: Returns 5% -4% -3% 12% 6.50%

Q: Given the following probability distribution, compute for Outcome Probability Expected Return 20%…

A: As information expected return is as follows:   Probability Return Expected return A B C=A*B…

Q: ndard deviation of the following annual returns:

A: Standard deviation of a portfolio is the measures that indicates the deviation of return from the…

Q: Calculate the project's coefficient of variation. (Hint: Use the expected NPV.) Squared dev. Prob.…

A: Financial management consists of directing, planning, organizing and controlling of financial…

Q: 6-5. (Standard deviation) Given the following prot Nasional Berhad, find the standard deviation.…

A: The standard deviation is a tool that dictates that how much variance between the average and actual…

Q: Use the following returns for X and Y. Returns Year Y 1 22.8% 29.4% 17.8 10.8 - 4.8 31.4 2 - 21.6 –…

A: Standard deviation is a variation in the mean value of given data. Standard deviation is a…

Q: A probability distribution of possible returns from a share has a variance of 0.0064.  What is the…

A: In the given question we are given variance of a probability distribution of possible returns from a…

Q: Pick out the two most significant variances that you computed in (1) above. Explain tMs. Dunn…

A: The difference between the standard figures and the actual results are called variances.

Q: Requirement: Compute for the following variances 1. Fixed Spending Variance 2. Variable Spending…

A: Lets understand the basics. Fixed overhead spending variance indicates the variance between the…

Q: B. Given the possible causes of the variances, identify the variance for each number and whether…

A: Identifying the names of variances and whether they are favourable or unfavourable is shown…

Q: Use the following returns for X and Y.     Returns   Year x y 1 21.8% 26.4% 2 -16.8 -3.8 3 9.8 28.4…

A: Average return refers to the mean value of returns that an asset has provided over past years and…

Q: Use the following returns for X and Y. Returns Year Y 21.5% -16.5 1 25.5% - 3.5 27.5 - 14.0 31.5 2 3…

A: Using the Excel format for calculations

Q: State 1 2 3 Pr(a) 0.2 0.6 0.2 Given the probability distribution above, determine (Calculate) and…

A: Risk and return:  The connection between risk and return is a cornerstone of the investment process.…

Q: 29 Calcalate the coefficiert of variation for a sct of data with standard deviation of 4.2, number…

A: Coefficient of Variation = Standard Deviation/ Mean   Coefficient of variation = Square root of…

Q: Calculate the standard deviation for the following returns:

A: Standard Deviation: It is a measure of statistics measuring the dispersion relative to the mean.

Q: If beta of Stock A with market is 0.72 and and the market variance is 225 , the covariance between A…

A: Beta of stock A = 0.72 Market Variance = 225  Covariance between A and B = 202.5

Q: What is the variance of the following returns? State probability return Boom .2 .75 normal .55 .25…

A: Variance of return is defined as the measure of the risk inherent for an investment in single asset…

Q: Required: Use the variance formulas to compute the following variances. (Indicate the effect of each…

A: Variable-overhead spending variance  $54,000  U Variable-overhead efficiency variance  $42,000  U…

Q: Returns   Year X Y   1   16  %   20  %   2   19     31     3   10     15     4 – 8   – 17     5   10…

A: A statistical measure that represents the variation in the return on the stock is term as the…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.