Use the table for the question(s) below.Consider the following realized annual returns:IndexStock AYear End Realized.RealizedReturnReturn23.6%46.3%24.7%26.7%30.5% 86.9%9.0%23.1%-2.0%0.2%-17.3% -3.2%-24.3%-27.0%32.2%27.9%4.4%-5.1%7.4% -11.3%2000200120022003200420052006200720082009Suppose that you want to use the 10-year historical average return on Stock A to forecast theexpected future return on Stock A. The 95% confidence interval for your estimate of the expectreturn is closest to:O 6.5% to 26.3%.O-15.0% to 47.9%.-4.5% to 37.4%.13.2% to 19.5%.

Expected Return:The expected rate of return refers to the anticipated gain or loss on an investment…

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 23.6% 46.3% 24.7% 26.7% 30.5% 86.9% 9.0% 23.1% -2.0% 0.2% -17.3% -3.2% -24.3% -27.0% 32.2% 27.9% 4.4% -5.1% 7.4% -11.3% Suppose that you want to use the 10-year historical average return on Stock A to forecast the expected future return on Stock A. The 95% confidence interval for your estimate of the expect return is closest to:

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 23.6% 46.3% 24.7% 26.7% 30.5% 86.9% 9.0% 23.1% -2.0% 0.2% -17.3% -3.2% -24.3% -27.0% 32.2% 27.9% 4.4% -5.1% 7.4% -11.3% Suppose that you want to use the 10-year historical average return on Stock A to forecast the expected future return on Stock A. The 95% confidence interval for your estimate of the expect return is closest to:

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

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Compute the annual tracking error from the following information: Quarter Portfolio B's 1 2 3 4 O 1.06% O 2.12% O 3.67% O 4.25% O None Portfolio A's Return (%) 1.15 1.89 1.15 -0.47 Return (%) 1.65 -0.10 0.52 -0.60
Use the following information to compute the standard deviation of returns: Yearly Returns Year Return (%) 1 19 2 1 3 10 4 26 5 4 a. 12% b. 10.42% c. 0.87% d. 108.5%
Based on the provided data what is the standard deviation of the VOO ETF total returns for the 3-year period between 2021 to 2023? Year 2023 2022 2021 2020 2019 T-bill total return 4.29% -3.82% -0.60% 3.16% 3.59% 20% average return ≤ 25% 25% < average return ≤ 30% 30% < average return ≤ 35% 35% average return S&P 500 total VOO ETF total return return 26.29% 26.33% -18.11% -18.15% 28.71% 28.60% 18.40% 18.40% 31.49% 31.47%
Calculate the correlation coefficient (PAB) for the following situation: (Round intermediate calculations and the final answer to 4 decimal place, e.g. 0.2921.) State of the Probability of Expected return on Expected return on economy occurrence stock A in this state stock B in this state High growth 30% 39.5% 56.5% Moderate 25% 18.5% 26.5% Recession 45% -6.5% -16.5% Correlation coefficient
The following are monthly percentage price changes for three market indexes Month DJIA S&P 500 Nasdaq 1 0.02 0.03 0.05 2 0.07 0.07 0.23 -0.02 -0.02 -0.05 0.01 0.0 0.05 5 0.05 0.05 0.13 6-0.06 -0.04 -0.06 What is the covariance between the rates of return for S&P 500 and Nasdaq? 4 Oa. 0.0041 The following are monthly percentage price changes for three market indexes Month DJIA S&P 500 Nasdaq 1 0.02 0.05 0.07 0.2 -0.02 -0.05 0.01 0.05 5 0.05 0.13 6 -0.06 -0.06 What is the covariance between the rates of return for S&P 500 and Nasdaq? 2 3 4 a 0.0041 0.03 0.07 -0.02 0.03 0.05 -0.04
Measuring risk and rate return) Given the following holding-period returns, calculate the average return for the market. Month Champ Inc. Market 1 2.8% 1.8% 2 3.2% 1.2% 3 9.0% 11.0% 4 -2.6% -1.0% 5 -2.9% -4.7% 6 12.0% 8.0% answer is 2.72%
es Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 5.7 percent and the standard deviation was 18.3 percent. a. What is the probability that your return on this asset will be less than -4.1 percent in a given year? Use the NORMDIST function in Excel® to answer this question. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What range of returns would you expect to see 95 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c. What range of returns would you expect to see 99 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter…
Consider the following returns: Year End 2004 2005 2006 2007 2008 2009 O Stock Y Stock Z Realized Realized Return Return - 14.6% 0.2% 4.3% - 3.2% - 25.7% - 58.1% - 27.0% 56.9% 71.1% 27.9% 6.7% 17.3% - 5.1% 17.9% 0.9% - 11.3% The covariance between Stock X's and Stock Y's returns is closest to: Stock X Realized Return 20.1% 72.7% M OA. 0.10 OB. 0.12 OC. 0.69 OD. 0.29 ...
An investor recorded the following annual returns of one of his investments. You are required to calculate and comment on; 1. Mean return. 2. Variance and standard deviation of the return. 3. Geometric return. Year 2016 2017 2018 2019 2020 Return 15% 17% 19% 10% -5%
Given the following information about past returns for Saphir Netmarketing, what is the standard deviation of returns? Year Return 1 12.00% 8.30% 3 -4.70% 4 -0.90% 5.70% O Type here to search
Given the following adjusted closing price data and computed annual returns, compute the three-year average return followed by the five-year average return to 12/31/22. Use arithmetic average. Date Adj Close Period Return 01/01/18 $8.00 01/01/19 $7.00 01/01/20 $8.00 01/01/21 $6.00 01/01/22 $8.00 12/31/22 $10.00 a. 8.3%, 7.0% b. 11.1%, 7.0% c. 7.5%, 8.8% d. 11.1%, 8.8% -12.50% 14.29% -25.00% 33.33% 25.00%
Given the following yearly percentage price changes for 3 market indexes. Compute the Covariance of PSEI & SSE; SSE & RUSSELL 100 Year PSEI SSE RUSSELL 100 1 0.03 0.02 0.04 2 0.07 0.06 0.1 3 -0.02 -0.01 -0.04 4 0.01 0.03 0.03 5 0.05 0.04 0.11 6 0.07 0.06 0.1 7 -0.02 -0.01 -0.04 8 0.01 0.03 0.03 9 0.05 0.04 0.11 10 -0.06 -0.04 -0.08

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