Expected Return Compute the expected return given these three economic states, their likelihoods, and the potential returns: Economic StateProbabilityReturnFast Growth .2 30.8%Slow Growth .5 6.40%Recession .3 -2.40%

Formula: Expected rate of return = (Expected rate of return in Fast Economic growth X Probability of…

Answered: Expected Return Compute the expected…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Use the following information to answer the question. Based on above data, determine the expected return? Select one: a. 12.06% b. 19% c. 17.35% d. 16.72%
QB: .Determine the covariance between assets R and S with the following data: State Prob Return J Return S Boom 0.1 16 22 Recession 0.2 -7 -4 Normal 0.4 12 11 Recovery 0.1 11 16 Slow Growth 0.2 14 20 Is it advisable to diversify?
Consider the following returns and states of the economy for TZ.Com.: Economy Probability Return Weak 40% 1% Normal 50% 8% Strong 10% 39% What is the standard deviation of TZ's returns? SET YOUR CALCULATOR TO FOUR DECIMAL PLACES AND ROUND TO 2 DECIMAL PLACES AT THE END. DO NOT ENTER THE %. FOR EXAMPLE, IF YOUR ANSWER IS 7.70% ENTER IT AS 7.70.
Consider the following data. Period 1 2 3 4 Rate of Return (%) - 5.8 - 8.0 - 3.8 2.0 5 5.2 What is the mean growth rate over these five periods (to 2 decimals)? Enter negative value as negative figure. X %
Consider the following information: State of Economy Recession Normal Boom Probability of State of Economy .22 .47 .31 Expected return Rate of Return if State Occurs -.11 .13 .32 Calculate the expected return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) %
level of retu State of Economy Probability .40 .30 .30 Asset A 30% Boom Normal Recession Asset B 20% 15% -10% 0% -20%
Security Returns if State Occurs State of Economy Bust Boom Probability of State of Economy Roll Ross .40 .60 -10% 28 21% 8 Calculate the expected returns for Roll and Ross by filling in the following table (A negative value should be indicated by a minu sign. Do not round intermediate calculations. Calculate the product using the decimal value of the probability and the percen value of the return. Input all of your answers as a percent rounded to 2 decimal places.) Roll Ross State of Economy Probability of State of Economy Return If State Occurs Product Return If State Occurs Product Bust .40 -10% % 21 % % Boom 60 28 % % E(R) = 12.80 % 8% E(R)= % 13.20 %
Consider the following data. ▾ Hide Feedback Period 1 Incorrect 2 3 Rate of Return (%) - 5.8 4 5 5.2 What is the mean growth rate over these five periods (to 2 decimals)? Enter negative value as negative figure. -2.08 % - 8.0 - 3.8 2.0
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A small increase in the annual rate of economic growth can lead to a larger increase in growth over time due to the effects of A the money supply. B compounding. C) regression towards the mean. D averaging.
Felix is estimating the return for Togo Sledding and has determined the following probabilities and expected returns. Togo's expected return is closest to: Expected Probability Return Roaring expansion Steady high growth Steady moderate growth Slowing Recession 9% 17% 11% 14% 15% 8% 42% 3% 23% -5%
Nikul

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Economic State	Probability	Return
Fast Growth		.2	30.8	%
Slow Growth		.5	6.40	%
Recession		.3	-2.40	%

Expected Return Compute the expected return given these three economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast Growth .2 30.8 % Slow Growth .5 6.40 % Recession .3 -2.40 %