If the standard deviation of returns on the market is 10 percent, and the beta of a well- diversified portfolio is 1, calculate the standard deviation of this portfolio. O 10% O 20% 30% O Cannot be determined!
Q: 5 -2020 the mean annual gain of the Dow Jones was 651. A random sample of 33 years is selected from…
A: AnswerGiven,The population mean = 651The sample size [n] = 33The standard deviation = 1541
Q: • 1. Consider the following return on stocks, which as the same average return. Which stock is…
A: From given data: x¯=y¯=13.20 Return Stock A (x) (x-x¯)2 Return Stock B (y) (y-y¯)2 13 0.04 15…
Q: We consider a market with 1 riskfree asset and N risky assets. The following tables show the…
A: To determine if the portfolio chosen by the investor is the desired portfolio, we need to check if…
Q: If the average low temperature of a winter month in Rochester, NY is 13∘13∘ and the standard…
A: Consider a variable, X: low temperature of a winter month in Rochester.To find the probability(in…
Q: Suppose that the annual rate of return for a common biotechnology stock is normally distributed with…
A:
Q: ) Annual returns on the more than 5000 common stocks available to investors vary a lot. In a recent…
A: Hi! Thank you for the question, As per the honor code, we are allowed to answer one question at a…
Q: An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected…
A: A BExpected return on stock A21%Expected return on stock…
Q: Suppose now that the mean µ and standard deviation σ of this distribution are both unknown.…
A: With the general assumption, the distribution of driving speed of drivers in US is considered to be…
Q: (b) The amount of money spent on groceries per year by the residents of a housing area is normally…
A:
Q: You own an investment which has an arithmetic mean return of 30% and a standard deviation of 15%.…
A:
Q: 32. A stock has an average historical return of 11.3 percent and a standard deviation of 20.2…
A: The mean is μ=11.3The standard deviation is σ=20.2The objective is to choose the correct range of…
Q: Suppose that,to test the profitability of name changes in the more recent market (the past 5 years),…
A: The Z-score of a random variable X is defined as follows: Z = (X – µ)/σ. Here, µ and σ are the mean…
Q: What is the probability, p1, (assuming that the past pattern of variation continues) that the mean…
A:
Q: Compute the standard deviation of the R/USD data series 2. Describe the shape and skewness of both…
A: Standard deviation is for R/USD given by, Std dev=√ E(X2)-x̄2 Mean, x̄= ΣXi/n…
Q: The Capital Asset Pricing Model (CAPM) is a financial model that assumes returns on a portfolio are…
A: Given that. X~N( μ , ?) μ=14.7 , ?=33 Z-score =( x - μ )/?
Q: Suppose that the annual rate of return for a common biotechnology stock is normally distributed with…
A:
Q: 5. Changes in the value of two particular cryptocurrencies are modelled as Normal distributions.…
A:
Q: Suppose that you are considering an investment project with a two-year life. If the annual cash…
A: Given:
Q: In a study to see if profits were declining very much, a random sample of 23 companies was taken…
A: Let the population follows the normal distributionHere, the samples are taken randomly and…
Q: Suppose that many stocks are traded in the market and that it is possible to borrow at the risk -…
A: StockExpected ReturnStandard DeviationA8%55%B4%45%Correlation 1
Q: A portfolio with a beta of 0.7 with market and residual variance of 10, market variance being 196 ,…
A: Given information: The residual variance is σe2 = 10. The market variance is σM2 = 196. The beta…
Q: u can just answer no. 2
A: 2) Given w1 = 0.30 w2 = 0.70 E[R1] = 0.1 E[R2] = 0.2 Var[R1] = 0.25 Var[R2] = 0.45 Correlation ρ =…
Q: Suppose that the lifetime income of current graduates of UT is exponentially distributed. Of course,…
A: The mean of the exponential distribution is uniformly distributed between 0.8 million dollars and…
Q: government bonds are normally distributed. Based on the information, what is the approximate…
A: Here given rate of return normally distributed Mean = 5.8 Standard deviation = 9.3% X = rate of…
Q: 2. a. Distinguish between correlation and regression analysis. [2]
A: Hi! Thank you for the question, As per the honor code, we are allowed to answer one question at a…
Q: Two friends, Andy and Bob, participate in a game of bowling every week. From past experiences, it is…
A:
Q: Suppose you have returns with the following statistics: mean=1% per month; std deviation=3% per…
A:
Q: 3. In the long run, anqual real returns on common stocks have been normally distributed with mean…
A: Note : "Since you have posted a question with multiple subparts, we will solve first three subparts…
Q: If the correlation between X and Y is r = -0.61 and if the standard deviations of X and Y…
A:
Q: Suppose the returns of a particular group of mutual funds are normally distributed with a mean of…
A: μ = 12.4 σ = 4.7 Manager wants his fund to be in top 5% = 0.05
Q: Three years of realized returns for Walmart Inc. ( WMT) are given in the following table: Year 2020…
A: Stock return is the average return over the years.Stock risk is the percentage that the actual stock…
Q: Consider a firm with zero coupon bonds that mature in 9 months and combined face value of $100000.…
A: Solution: It is needed to find the value of equity.
Q: You have a portfolio of investment which consists of Stock A with a retum of A% and Stock B with a…
A:
Q: RISK (Standard deviation of portfolio return) 8 01 True 4 False I 1 10 20 30 NUMBER OF STOCKS IN…
A: Given: The data of few compamies are given we need to find certain question.
Q: Suppose that the index model for stocks A and B is estimated from excess returns with the following…
A: Please find the explanation below. Thank you
Q: The following table shows the returns of two types of investments, stocks (x) and bonds (y), under…
A: In the question text , we have been clearly asked : expected return from bonds? What is the risk…
Q: Suppose that the annual rate of return for a common biotechnology stock is normally distributed with…
A: Given: Stock is normally distributed Mean=4.5% Standard deviation =4%
Q: his figure, presents the percentage deviation from the 60:40 ratio in the market values of equity of…
A: Given that,
Q: Scenario: Suppose a financial institution holds a well diversified $35,500,000 position in stocks.…
A: In this question, we are given a financial institution's diversified position in stocks, the…
Q: Over the entire 20th century, the real (that is, adjusted for inflation) annual returns (in percent)…
A: Given, U.S. common stocks had mean 8.7 and standard deviation 20.25 and the distribution of annul…
Q: You make an investment. Assume that annual returns are normally distributed with a mean return of…
A: Given Information: Mean μ=0.05 Standard deviation σ=0.20
Step by step
Solved in 2 steps
- Andrew plans to retire in 30 years. He plans to invest part of his retirement funds in stocks, so he seeks out information on past returns. He learns that over the entire 20th century, the real (that is, adjusted for inflation) annual returns on U.S. common stocks had mean 8.7% and standard deviation 20.2%. The distribution of annual returns on common stocks is roughly symmetric, so the mean return over even a moderate number of years is close to Normal.What is the probability that the mean return will be less than 6%?Pax World Balanced is a highly respected, socially responsible mutual fund of stocks and bonds. Vanguard Balanced Index is another highly regarded fund that represents the entire U.S. stock and bond market (an index fund). The mean and standard deviation of annualized percent returns are shown below. The annualized mean and standard deviation are for a recent 10-years period.†. If x represents return and s represents risk, then explain why the coefficient of variation can be taken to represent risk per unit of return. From this point of view, which fund appears to be better? Explain. A. Since the CV is s/s2 we can say that the CV represents the risk per unit of return; the Pax fund appears to be better because the CV is smaller. B. Since the CV is s/s2 we can say that the CV represents the risk per unit of return; the Vanguard fund appears to be better because the CV is smaller. C. Since the CV is s/x we can say that the CV represents the risk per unit of return; the Pax fund…Suppose that an accounting firm does a study to determine the time needed to complete one person's tax forms. It randomly surveys 200 people. The sample mean is 22.3 hours. There is a known population standard deviation of 7.0 hours. The population distribution is assumed to be normal. Find the following. (Enter exact numbers as integers, fractions, or decimals.) (i) x = (ii) ? = (iii) n =
- Suppose that the value of an index of the stock market increases on average about 0.02% per day (calculated with continuous discounting) and a volatility (i.e., standard deviation) of 1% per day. Assuming that the returns are Normally distributed, what would be the 5% Daily Expected Shortfall (ES) expressed as a percent return? (Note: Enter your answer rounded to the nearest 2 decimal places. (For example, -1.2345% should be entered as -1.23%).Suppose that the borrowing rate that your client faces is 9%. Assume that the equity market index has an expected return of 13% and standard deviation of 25%, that rf = 5%. Your fund manages a risky portfolio, with the following details: E(rp) = 11%, p = 15%. What is the largest percentage fee that a client currently lending (y 1)? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 1 decimal place.) y 1Andrew plans to retire in 40 years. He plans to invest part of his retirement funds in stocks, so he seeks out information on past returns. He learns that over the entire 20th century, the real (that is, adjusted for inflation) annual returns on U.S. common stocks had mean 8.7% and standard deviation 20.2%. The distribution of annual returns on common stocks is roughly symmetric, so the mean return over even a moderate number of years is close to Normal. What is the probability (assuming that past pattern of variation continues) that the mean annual return on common stocks over the next 40 years will exceed 10%? What is the probability that the mean return will be less than 5%?
- QUESTION 4 If researhers reject the null hypothesis when it is true, a Type I error has been made. O True O False QUESTION 5 An investment analyst wants to establish whether there is a change in the mean rate of return for 101 and conducted an ANOVA test that is shown as follows. df I MS Variation Cliek Save and Submit to save and submit. Chck Save AlL Answers to save all answers.I have problem in the question number #2, but the answer is with the result of question number #1Suppose the returns of a particular group of mutual funds are normally distributed with a mean of 9.5% and a standard deviation of 5.1%. If the manager of a particular fund wants to be sure that his fund is NOT in the bottom 25% of funds with the lowest return, what return must his fund have? (please round your answer to 2 decimal places)
- Suppose the returns on a particular asset are normally distributed. Also suppose the asset had an average return of 12.1% and a standard deviation of 26.6%. Use the NORMDIST function in Excel to determine the probability that in any given year you will lose money by investing in this asset. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.): Probability 32.46 %A certain brokerage house wants to estimate the mean daily return on a certain stock. A random sample of 12 days yields the following return percentages.−1.81, 1.54, 1.52, −2.58, −2.3, 0.97, 0.93, −1.06, 1.04, 0.2, −0.63, −2.75 Send data to calculator If we assume that the returns are normally distributed, find a 90% confidence interval for the mean daily return on this stock. Then find the lower limit and upper limit of the 90% confidence interval. Carry your intermediate computations to at least three decimal places. Round your answers to one decimal place. (If necessary, consult a list of formulas.) Lower limit: ? Upper limit: ?If the expected return on the market is 8% and the risk for your rate is 4%. What is the expected return for a stock with a beta equal to 2.00?