Four assets have the following distribution of returns. Probability                                    Rate of return (%) Occurrence                   A                  B             C                D 0.1                               10.0               6.0           14.0            2.0 0.2                               10.0               8.0           12.0            6.0 0.4                               10.0               10.0         10.0            9.0 0.2                               10.0               12.0          8.0             15.0 0.1                               10.0                14.0         6.0              20.0 In each asset alculate The expected rate of return, standard deviation, variance coefficient of variation

Q: Calculate : M-squared measure T-squared measure, and Appraisal ratio (information ratio) Fund…

A: M-squared measure = Sharpe ratio*SDmarket + Risk free rate T-square = (Treynor ratio)2  Appraisal…

Q: Over a particular period, an asset had an average return of 6.7 percent and a standard deviation of…

A: The expected return is the gain or loss that a trader predicts on a particular previous rate of…

Q: he _____ or _____ interest rate reflects the real rate of return on an investment. a. annual or…

A: The rate of return without considering the impact of compounding and effective is the rate of return…

Q: Return on Asset D in State Return on Asset E in State Return on Asset F in State Boom 0.35 0.060…

A: Standard deviation of a security is a measure of risk of a security which denotes the variation in…

Q: State of Economy Probability of State Return on Asset D in State Return on Asset E in State Return…

A: Expected return on investment is the expected value of the probability distribution of return it can…

Q: B 15.5% 20.2%

A: The coefficient of variation can be computed as follows :

Q: Assume that we wish to determine the expected value and standard deviation of returns of Assets A.…

A: Risk expressed the chances of not getting the expected return. One of the measurement tools of risk…

Q: Determine, using Capital Assets Pricing Model (CAPM), the Expected Rate of Return Risk free rate was…

A: We need to compute the expected rate of return for asset E in this question.

Q: Complete the following table. Use Exhibit 1-B. (Round time value factors to 3 decimal places and…

A: Annuity refers to series of equalized payments that either made at start or end of specified…

Q: Enter percentage values to 2 decimals (10.52% entered as at is the IRR of the proposed investment? %…

A: In this we have to calculate internal rate of return of investment.

Q: Over the past 4 years an investment returned 0.1, -0.12, -0.08, and 0.13. What is the standard…

A: Return in year 1 is 0.1 Return in year 2 is -0.12 Return in year 3 is -0.08 Return in year 4 is 0.13…

Q: The single sum, present worth factor: a. Can be depicted as (1 + i)−n b. Can be depicted as (P|F…

A: Today’s worth of dollars at a later date is the Present Value of the dollar. For example, the value…

Q: An asset has values S(0) = 10 and S(1, 1) = 9 with up factor u = 1.1 and the return over one…

A: The no arbitrage rule is as follows:0< d< 1+r or R < u or 0 < π < 1 we are given S(1,…

Q: Asset 1 Asset 2 Expected return 0.07 0.078 Standard deviation 0.1 0.2 if correlation is 0.4 weight 1…

A: In order to determine the risk and performance of the portfolio investors uses measures such as…

Q: The amount of money in an investment is modeled by the function A = 600(1.0317)'. The variable A…

A: given, A=600×1.0317tt = no of years since 2006

Q: Two assets A and B have return of 22% and 20% and Risk of 15% and 18% respectively with correlation…

A:

Q: Use the information from this table to calculate the correlation coefficient for the assets.

A: Following are the information given: Return on Asset J           Return on Asset K 5%…

Q: The probability distributions of expected returns for the assets are shown in the following table:…

A: We need to compute return and standard deviation for asset A.

Q: The possible rates of return of two assets, A and B, under different economic conditions are given…

A: Different assets have different level of risk and return. Investor analysis the risk involved in…

Q: Match the measures of worth in the first column with one (or more) of the analysis approaches that…

A: Ranking approach: Under the ranking approach, one predetermined parameter is used to evaluate…

Q: What is the expected return of investing equally in all three assets M, N, and 0? % (Round to two…

A: Expected return: First, it is required to compute the expected return of each state. Then the return…

Q: Asset A has 3 units of exposure to factor 1 risk and 1 unit of exposure to factor 2 risk and has…

A: We will first take the value of the first factor as x and the second factor as y, then we will solve…

Q: Investments A and B have the net cash flows given. Value UI T Ior Which PW (1)c PW (1)p? 10. End of…

A:

Q: Which one of the following best describes an arithmetic average return?

A: Arithmetic average return is the mean of all returns and hence is computed by adding all the returns…

Q: Compute for the following: 1. Accounting rate or return based on the average investment 2. Net…

A: The capital budgeting is a technique that helps to analyze the profitability of the project.

Q: Two capital assets display the following: E(RA) = 12%              σA = 1.5% E(RB) = 15%…

A: Slope = (E(RA) +  asset A´s return below the Capital Market Line) - (E(RB) + asset B´s return below…

Q: Given i= 15.29% compounded semi-annually and n=8, determine the following a. Gradient to uniform…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: Assume that we wish to determine the expected value and standard deviation of returns of Assets A.…

A: Year Return % (r) Probability (p) Product (r*p) 2019 18 .20 3.60 2020 16 .15 2.40 2021 13 .25…

Q: The expected value and the standard deviation of returns for asset A is   12.7% and 2.3% 12.7% and…

A: Expected return = Sum of weighted probability return. Standard deviation = Square root of variance.

Q: When using annual worth to evaluate the attractiveness of a single alternative, what value is the…

A: AW (annual worth) is compared to 0.0   0.0 value is calculated for the AW(annual worth) and…

Q: a) How many possible rate of returns b) If the reinvestment rate c = 15%, find the composite rate of…

A: Rate of Return: This return represents the net profit or loss over a period for the investment. It…

Q: ired: Compute the average rate of return for each investment. If required, round your answer to one…

A: The Net Present Value (NPV) is a financial analysis technique for assessing the viability of an…

Q: Assume the returns from holding an asset are normally distributed. Also assume the average annual…

A: Solved using Excel: Excel Formula = NORM.DIST(X, Mean, Standard deviation, Cummulative) Where, X =…

Q: (a) If Pena Company requires a 9% return on its investments, what is the net present value of this…

A: Net Present Value(NPV) is a financial metric that is used to evaluate the potential investment…

Q: Determine, using Capital Assets Pricing Model (CAPM), the Expected Rate of Return Risk free rate was…

A: we need to compute the expected rate of return for asset H in the given question from following…

Q: 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%

A:

Q: Determine, using Capital Assets Pricing Model (CAPM), the Expected Rate of Return Risk free rate was…

A: In given question we need to compute the expected rate of return for asset G.

Q: (b) Find the time path of capital K(t) given the following rates of net investment flow functions…

A: Net investment is the cost incurred to purchase the capital assets after subtracting the…

Q: Expected return and standard deviation a. What is the expected return of asset J? Return on Asset J…

A: Expected Return on stock J = sum of  (Expected return * probability)

Q: The data presented below represents the expected returns on a financial asset in different seasons…

A: Data given: Season of year Probability Return(%) Spring 0.40 0.02 Summer 0.35 0.06 Winter…

Q: What is the profitability index of an investment with cash flows in years 0 thru 4 of -340, 120,…

A: Profitability Index - It is obtained by dividing the present value of future cash inflows by the…

Q: Assume the returns from holding an asset are normally distributed. Also assume the average annual…

A: Probability solved in excel  Excel function is =NORM.DIST(X, Mean, Standard Deviation,cummulative)…

Q: We have three assets A1, A2, A3 and the following information: E(r1)=15%, σ1=12%,; E(r2)=19% and…

A: The diversification of assets: A portfolio comprises various assets in order to reap the benefits of…

Q: 15. Consider the following possible returns over the next year on an asset. Return Probability –£40…

A: Each asset or investment have some risk factor, risk factor means assets are unable to provide…

Q: According to Wald's criterion, which investment is decided by looking at the profitability of three…

A: The wald's criterion is the maximin criterion of selecting the best suitable alternative from a…

Q: Determine, using Capital Assets Pricing Model (CAPM), the Expected Rate of Return Risk free rate was…

A: In given question we need to compute the expected rate of return for asset C.

Liquidity Risk Exposure

Answer: c