12 % 8 % -4% Cold Drinks ShopWhat is the expected return of investing in an Ice Cream Shop?
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- Find the expected value of the trader's profit.A stock has normally distributed returns with expected return of 10% and volatility of 15%. What is the probability that the return in a given year is above 40%? A. More than 3%. B. Less than 3%. C. Less than .3%. D. More than 47%.The Capital Asset Pricing Model (CAPM) is a financial model that assumes returns on a portfolio are normally distributed. Suppose a portfolio has an average annual return of 14.7% (i.e. an average gain of 14.7%) with a standard deviation of 33%. A return of 0% means the value of the portfolio doesn't change, a negative return means that the portfolio loses money, and a positive return means that the portfolio gains money. (please round answers to within one hundredth of a percent) (a) What percent of years does this portfolio lose money, i.e. have a return less than 0%? (b) What is the cutoff for the highest 15% of annual returns with this portfolio?
- The Capital Asset Pricing Model (CAPM) is a financial model that assumes returns on a portfolio are normally distributed. Suppose a portfolio has an average annual return of 14.7% (i.e. an average gain of 14.7%) with a standard deviation of 33%. A return of 0% means the value of the portfolio doesn’t change, a negative return means that the portfolio loses money, and a positive return means that the portfolio gains money. What percent of years does this portfolio lose money, i.e. have a return less than 0%? What is the cutoff for the highest 15% of annual returns with this portfolio?Risk and Returns. Windsor stock has produced returns of 22.6 percent, 18.7 percent, 15.7 percent, 11.3 percent, 9.8 percent, 7.2 percent, 5.8 percent, 3.1 percent, 1.7 percent, 0.3%, -2.7% and -5.4 percent over the past twelve years, respectively. What range of returns would you expect to see on this stock 95 percent of the time? Please show workHi! I was working on the question below: The Capital Asset Pricing Model (CAPM) is a financial model that assumes returns on a portfolio are normally distributed. Suppose a portfolio has an average annual return of 14.7% (i.e. an average gain of 14.7%) with a standard deviation of 33%. A return of 0% means the value of the portfolio doesn’t change, a negative return means that the portfolio loses money, and a positive return means that the portfolio gains money. And question (a) looks like: What percent of years does this portfolio lose money, i.e. have a return less than 0%? I got a z-score of -0.4455, which corresponds to the p value of 0.3264 on the z-table; I don't understand why the correct answer should be 0.3280 as said by one of the solutions, and I cannot locate such a number on the z-table. Thank you so much!
- Assume that an economy can have four states: Severe recession, Mild recession, Normal growth, Boom. Probability of each scenario, stock and bond annual returns in that scenario are provided below. Let's also assume that you are creating a portfolio with 65% stocks and 35% bonds. Economy State Probability Severe recession 0.20 Stock Return (%) Bond Return (%) #1TT Mild recession 0.30 Normal growth Boom 0.40 0.10 How much is the annual standard deviation of Stock returns? Enter your answer in the following format: 0.1234 Hint: Answer is between 0.1938 and 0.2373Measures of Dispersion 3. A fund manager is considering investment in the equity shares of one of two companies. The criterion for selecting the company for investment is consistency of return on net worth. The following data have been collected: Financial Return on Networth (%) Modern Industries Ltd. (MIL) Pioneer Industries Year Ltd. (PIL) 2010-2011 19 20 2009-2010 20 24 2008-2009 16 16 2007-2008 13 15 2006-2007 12 10Find the expected value of this investment scheme. Profit/Loss Amount Probability -$6200 0.08 -$150 0.66 $4500 0.02 $2000 0.24
- A stock has monthly returns of 9%, 22%, 15%, and 28%. What is the stock's geometric average return?Consider the following return on stocks, which as the same average return. Which stock is riskier?An insurance policy costs $105 per year and insures the items in the policy owner's home against theft for the year in which coverage is purchased. Which of these correctly describes the additional information that the insurance company will need to calculate an expected net return per policy? A The number of policies sold only B The payout to the insured if a theft occurs only C The number of policies sold and the probability of damage occurring to the home D The probability of theft of property from the policy owner's home and the payout to the insured if a theft occurs