A stock's return has the following distribution: Calculate the stock's expected return and standard deviation. Scenario Probability Return Weak 0.1 -20% below average 0.2 -5% average 0.4 16% above average 0.1 25% strong 0.2 60% r= 4.40%, and std.dev = 26.96% Or= 13.84%, and std.dev = 18.62% Or= 11.40%, and std.dev = 26.69% Or= 14.40%, and std.dev = 20.62%
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- The index model has been estimated for stock A with the following results: RA = 0.01 + 1.2RM + eA. σM = 0.15; σ(eA) = 0.10. The standard deviation of the return for stock A isA stock's returns have the following distribution: Probability Rate of Return 0.1 -2% 0.2 -10% 0.4 10 % 0.2 20 % 0.1 30% Calculate the stock's a) expected return, b) standard deviation, and c) coefficient of variation.Consider information given in the table below and answers the question asked thereafter: State Probability return on stock A Return on stock B A 0.15 10% 9% B 0.15 6% 15% C 0.10 20% 10% D 0.18 5% -8% E 0.12 -10% 20% F 0.30 8% 5% Calculate covariance and coefficient of correlation between the returns of thestocks A and B.v. Now suppose you have $100,000 to invest and you want to a hold a portfoliocomprising of $45,000 invested in stock A and remaining amount in stock B.Calculate risk and return of your portfolio.
- You are given the following probability distribution of returns for a stock. Use the data to calculate the expected return, standard deviation of returns, and coefficient of variation of returns for the stock. Report the CV to 4 decimal places (13.36% = 0.1336). Return Probability 8.0% 0.20 10.0% 0.10 12.0% 0.40 15.0% 0.20 16.0% 0.10Based on the following information, calculate the expected return and standard deviation for Stock A and Stock B. Input area: State Probability Stock A Stock B Recession 0.15 0.04 (0.17) Normal 0.55 0.09 0.12 Boom 0.30 0.17 0.27 (Use cells A6 to D9 from the given information to complete this question.) Output area: Stock A Probability Return Product Return deviation Squared deviation Product Recession Normal Boom B э O Standard deviation Stock B 2 Recession 3 Normal 4 Boom 5 26 Standard Deviation 27 28 E(R) Variance Probability Return Product Return deviation Squared deviation Product E(R) VarianceThe market and Stock A have the following probability distributions: Probability Return on market Return on Stock A 0.2 18% 16% 0.3 12% 14% 0.5 10% 11% Calculate the expected rates of return for the market and Stock A. Calculate the coefficient of variation for the market and Stock A (Standard deviation for market is 3.0265% and standard deviation for Stock A is 2.0224%).
- A stock’s returns have the following distribution:Demand for theCompany’s ProductsProbability of thisDemand OccurringRate of Return if thisDemand OccursWeak 0.1 (30%)Below average 0.1 (14)Average 0.3 11Above average 0.3 20Strong 0.2 451.0Assume the risk-free rate is 2%. Calculate the stock’s expected return, standard deviation,coefficient of variation, and Sharpe ratio.A stock's returns have the following distribution: Probability Rate of Return 0.1 -25% -10% 10% 0.2 0.4 0.2 0.1 20% 30% Calculate the stock's a) expected return, b) standard deviation, and c) coefficient of variation. a) 6.50%; b) 2.50%; c)0.39 a) 5.00%; b) 15.89%; c)3.18 a)5.00%; b) 15.82%; c)2.43 a) 6.50%; b) 15.82%; c)2.43Given the following information, determine the beta coefficient for Stock A that is consistent with equilibrium: expected return on A= 14.5%; rRF=4.0%; rM=10.5%
- A stock has an expected return (rs) of 10.4%, the risk-free rate (TRF) is 1.7%, and market risk premium (M-TRF) is 8.3%. What is this stock's Beta? Enter your answer as a number with two decimal places of precision (i.e. 1.23)Given the returns and probabilities for the three possible states listed below, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 8.10 percent and 11.60 percent, respectively. (Round answer to 4 decimal places, e.g. 0.0768.) Good OK Poor Covariance Probability 0.22 0.60 0.18 Return on Stock A 0.30 0.10 -0.25 Return on Stock B 0.50 0.10 -0.30Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 0.03 + 0.7 RM + eA RB = -0.02+ 1.2 RM + eB σM =0.20; R-square A = 0.25 R-square B = 0.20 What is the standard deviation of A & B, respectively? Group of answer choices 0.54, 0.28 0.28, 0.54 0.45, 0.50 0.50, 0.45