Consider the following table: Severe recession Mild recession Normal growth Boom Scenario. Mean return Variance Required: a. Calculate the values of mean return and variance for the stock fund. ( Covariance 7.2% 168.16 Stock Fund Probability Rate of Return 0.05 0.25 0.40 0.30 -28% -8% 13% 18% b. Calculate the value of the covariance between the stock and bond funds. ( 11.99 Bond Fund Rate of Return -13% 19% 12% -94

Q: Which of the following is false of the historical VaR?  a. It is based on normal distribution of…

A: Ans. Historical VaR do makes use of Monte Carlo Simulation.

Q: Why are some analyses called horizontal and others calledvertical?

A: In order to identify the reason behind that some analyses are called horizontal and others are…

Q: ROE can be disaggregated into operating and nonoperating returns. Nonoperating return will be…

A: ROE stands for "Return on Equity" it's a financial metric that measures the profitability of a…

Q: What are the differences between MIRR method and IRR method?

A: The question is related to MIRR and IRR.

Q: What is the put-call ratio? What is it used for? What are considered high and low values and what do…

A: The question is based on the concept for indicators of the stock market performance. The Put-Call…

Q: What’s the primary difference between the MIRR and the regular IRR?

A: It refers to the rate of return that is computed by the company to make a decision of selection of a…

Q: Explain noncumulative pari passu distribution?

A: Pari passu refers to equal footing in Latin. It is the situation where all the stakeholders of the…

Q: In a regression analysis, the variable that is being predicted is the a. Intervening variable O b.…

A: The variable that is attempted to clarify or anticipate is known as the the response variable,…

Q: Which cell or column is used for the covariance?

A: Here, Probability Stock Fund Rate of Return A B 0.1 -34% 0.2 -20% 0.3 21% 0.4 36%…

Q: What is the difference between vertical analysis and horizontal analysis?

A: Explain the difference between the horizontal and vertical analysis. Horizontal Analysis: it…

Q: Explain the assumptions of break-even analysis.

A: Break-even analysis - - Break-even analysis states that a number of units must be sold to cover the…

Q: What are the advantages of the scattergraph method over the high-low method? Thehigh-low method over…

A: Introduction: Cost accounting is beneficial since it can demonstrate where a corporation spends…

Q: How do you calulate breakeven point ?

A: Break even point (BEP): Breakeven is the point where total expenses are equal to total revenue. at…

Q: In linear regression, compare independent and dependent variables.

A: Linear regression refers to a time series model in statistics that is used for predictive analysis.…

Q: Explain errors of principle and give two examples with measures to rectifythem.

A: An error of principle is an accounting mistake in which an entry is recorded in the incorrect…

Q: It is good to assume that unusual items will be zero. True or False

A: Unusual or Infrequent Items are transactions that are unusual in nature or infrequent. The items…

Q: What are the two shortcomings of the direct write-off method?

A:

Q: When we use Excel to perform a regression analysis, the independent variable data must be contiguous…

A: The question states how data should be placed while conducting a regression analysis in excel. We…

Q: Is an higher NPV better than a lower NPV and why?

A: The net present value is the difference between sums of the present value of cash inflows and…

Q: Topic: Income Taxation Which of the following is considered a “constructive receipt” of gross…

A: Constructive receipt of gross income refers to situations where income can be used despite the…

Q: What is modified breakeven analysis?

A: Break even analysis refers to the financial computation that weights the new business cost, product…

Q: Explain the periodicity assumption.

A: Definition:   Generally Accepted Accounting Principles (GAAP): These are the guidelines necessary to…

Q: What is an observation that lies outside its expected distribution?   Multiple Choice   Outlier…

A: Given the following question What is an observation that lies outside its expected distribution?…

Q: Explain the difference between a linear risk and a nonlinear risk.

A: Linear risk is an enterprise's risk, based on the traditional economic system of "take-up-dispose."…

Q: which of the following is not a qualitative characteristic associated with Relevance? a.…

A: Financial statements should be true and fair, for presenting true and fair financial information;…

Q: Why is compound and simple interest different

A: If you have any questions let me know in comment box thankyou for your question.

Q: Does the IRR analysis yield the results consistent with PW and other equivalence methods?

A: Yes, the IRR analysis gives the results consistent with PW analysis and Equivalence methods.

Q: O An F test O Extrapolation is used to test the hypothesis that the values of the regression…

A: The f-test basically compares your model to one with zero predictor variables (the intercept alone…

Q: Is a negative Sharpe ratio good or bad?  EXPLAIN

A: What sharpe ratio measure? It measure the excess return earn by portfolio over risk free rate at…

Q: The range is an ideal measure of variation since it is not sensitive to extreme values in the data.…

A: False as the range is highly influenced by outliers, making it a less reliable measure of variation.…

Q: What is disbursal rate

A: Disbursal rate is an important concept in the realm of financial markets and in the realm of fintech…

Q: What are the differences and similarities between the Sharpe and Treynor measures?

A: Each asset or portfolio has a separate level of return and associated risk in response to the…

Q: Multivariate regression has multiple dependent variables. O True False

A: Multivariate regression It is not always possible that there is only one explanatory variable and…

Q: How does it compare with the NPV based on the WACC​ method?  ​(Select the best choice​ below.)…

A: WACC can be used as a discount rate to calculate the net present value of future cash flows from a…

Q: What is the VIX index? What is it used for? What are considered high values for the VIX and what do…

A: Volatility: - Volatility is a measure of movement or price variation in assets on daily, weekly,…