6-5. (Standard deviation) Given the following prot Nasional Berhad, find the standard deviation. PROBARILITY RETURN 0.35 8% 0.20 3% 020 20%

Q: The correlation of returns between A and B is:

A: Correlation: It is a measure of statistics that shows the degree to which two variables move in…

Q: With risk free rate of 5%, Beta of 2.00, market return of 10%, interest rate for credit 10%, tax…

A: WACC is calculated as weighted cost of equity plus weighted cost of debt

Q: 4. Given the probability and returns associated with each state, what is the expected return? What…

A: Calculations of expected return and standard deviation: Excel workings:

Q: Exercises: a. The standard deviation of returns is 0.30 for Stock A and 0.20 for Stock B. The…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: What is the standard deviation of returns of a portfolio that produced returns of 10%, 15%, 25%, and…

A: Given: Return 10% 15% 25% -20%

Q: The covariance of the returns on the two securities, A and B, is -0.005. The standard deviation of…

A: Given, Covariance = -0.005 Standard deviation of A's Returns = 3% Standard deviation of B's returns…

Q: What is the correlation between returns of stock S and T, given that covariance between stocks is…

A: Given, Covariance = 2.419 Standard deviation =1.23 and 2.21

Q: Refer to the table below: Expected return, E(R) Standard deviation, o Correlation 3 Doors, Inc. 17%…

A: A portfolio is created by collecting different classes of assets to minimum the risk associated with…

Q: Please provide step by step explaination (no excel) q5-

A: Introduction Variance of portfolio The degree of dispersion of a portfolio's returns is measured by…

Q: Given the following returns for Stock X and stock Y Stock X % return   Stock Y % return 2…

A: Calculate the variance and standard deviation as follows:

Q: Suppose that the index model for stocks A and B is estimated from excess returns with the following…

A: Calculation of standard deviation for each stock: Answer: Standard deviation of A is 31.30% Standard…

Q: The historical rate of return on stock A was regressed on the rate of return of stock M (the…

A: Solution- Total variance of security =standard deviation of security^2…

Q: 2. Given the following historical returns, calculate the average return and the standard deviation:…

A: standard deviation = square root of (sum of (Return-average)^2)

Q: 1. 1. The average variance of financial assets on a market is 0.4% and the average covariance tween…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

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: f a fund has a return of 12% and a standard deviation of 15%, and if the risk-free rate is 2%, then…

A: Sharpe ratio measures risk premium of an asset per unit of risk.

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: 2,25% and 6,25%, with a correlation of 50%. What would we the risk (standard deviation) of a…

A: Standard deviation of a portfolio is the total risk of the portfolio arising out of expected returns…

Q: The covariance of Security X's returns and Security Y's returns is 10, and the variance of Security…

A: Correlation = Cov(x,y)/(SDx*SDy) SD is standard deviation i.e. square root of variance.

Q: What is the standard deviation of Oliver's stock, giving the following information: Probability 30%…

A: Every investment has certain risk level which is arises due to fluctuations in market. Standard…

Q: Stock A has the following returns over the past periods. Calculate the downside risk measured by…

A: Downside risk is the risk of the market and it is a statistical measure which indicate the risk of…

Q: 9. Consider the two (excess return) index-model regression results for stocks A and B. The risk-free…

A: Here, Risk Free Rate is 6% Average Market is 14%…

Q: 0.15 0.05 001 -0.03 -0.01 0.09 the expected returns of the two stocks? the standard deviations of…

A: The term expected return of stock refers to the profit or loss amount which investor anticipates on…

Q: Calculate the expected return, variance, and standard deviation for a portfolio of four equally…

A: The expected return of the portfolio is the return that an investor gets based on the weightage…

Q: assume that the following data available for the portfolio, calculate the expected return, variance…

A: Given: Expected return of A =12.5% Expected return of B = 18.5% Standard deviation of A = 15%…

Q: What is the correlation coefficient of the returns of the stock and the returns of the market?

A: Correlation: It is a measure of statistics used to show the degree of association between two…

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: If two stocks have variance σ2=16 each, could their covariance be equal to σ12 = 20

A: It has been provided that the value of variance for two stocks is 16 . Thus, the standard deviation…

Q: A stock's return has a correlation of 0.67 with the market. The stock's standard deviation is 43%…

A: Introduction: The comparison of the whole market with the systematic risk or volatility of a stock…

Q: . Find the Expected Return, Variance, and Standard Deviation for the Stock Returns 1 and 2. Also,…

A: Following table shows the calculations for expected returns of stock 1. to find the expected…

Q: Given the following information on a portfolio of Stock X and Stock Y, what is the portfolio…

A: Given Variance on X = 0.0036 Variance on Y = 0.0144 Portfolio weight on X = 50% Portfolio weight on…

Q: Suppose two asset returns are described by a two factor model, n- 0% + 11 + 1.8/2 + e 12= -1% + 21 +…

A: Here, Volatility of First Factor is 30% Volatility of Second Factor is 10% Correlation between two…

Q: You have the following information: A B с Alpha 1.85% 2% -2.36% 0% Beta 1.36 0.95 1.98 1 Res. 2.00%…

A: The single index model: The single index model expresses the total returns of a portfolio as the…

Q: Under which of the following scenarios, the minimum variance portfolio that contains two stocks has…

A: Assuming weight of the first stock and the second stock in the portfolio as (W) and (1 - W) Standard…

Q: h) If the standard deviation of a stock’s return is 5% and its expected return is 8%, what it the…

A: given, rstock = 8%σstock =5%

Q: Market Data Risk-Free Rate Alpha Beta Market Data Company Data Residual standard deviation, o(e)…

A: Risk adjusted measures are used to determine the reward an investor would get for taking that amount…

Q: What is the standard deviation of Stock B returns given the information below about its returns…

A: Standard Deviation: Standard deviation is a measure of the dispersion of a set of data relative to…

Q: If two stocks have variance σ^2=16 each, could their covariance be equal to σ12 = 20

A: It has been provided that the value of variance for two stocks is 16 . Thus, the standard deviation…

Q: the correlation of Bank of America and Euribor 1 is :- - 1 - -1 - 0   Average yields…

A: The answer is stated below:

Q: You are given the following probability distribution for a stock: Probability…

A: Calculation of expected return, standard deviation and coefficient of variation using excel is as…

Q: Calculate and interpret the correlations between the two assets

A: Correlation of two assets helps to determine the relation between the two assets. The correlation…

Q: If the correlation between an asset and the market is 0.6, the standard deviation of the asset is…

A: The provided information is: Correlation between an asset and the market = 0.6 Standard deviation of…

Q: Suppose that the index model for stocks A and B is estimated from excess returns with the following…

A: Given information: Beta of stock A is 1.30 Beta of stock B is 1.60

Q: The following information are available: [3]     Stock A Stock B Expected Return 16% 12%…

A: Given  Stock A Expected Return - 16% Stock B Expected Return - 12% Stock A Standard Deviation - 5%…

Q: Here are the estimated ROE distributions for Firms A, B, and C:   Probability   0.1 0.2 0.4…

A: Hello, you have posted multiple questions. As per our guidelines, I have solved the first question.…

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.