% Return on T-Bills, Stocks and Market Index State of the economy Probability T-Bills Phillips Pay -up Rubber-made Market Index Recession 0.2 7 -22 28 10 -13 Below Average 0.1 7 -2 14.7 -10 1 Average 0.3 7 20 0 7 15 Above Average 0.3 7 35 -10 45 29 Boom 0.1 7 50 -20 30 43 Mean     16.9 2.07 19.60 15 Standard Deviation   0 23.4 15.62 18.92 17.71 Coefficient of Variation   0 1.39 7.55 0.97 1.18 Covariance with MP   0 0.04 -0.3 0.02 0.03 Correlation with Market Index   0 1 -1.0 0.69 1 Beta   0 1.32 -0.88 0.74 1 CAPM Req. Return   7 17.54 -0.02 12.89 15.0 Valuation (Overvalued/Undervalued/Fairly valued)   Fairly valued Overvalued Undervalued Undervalued Fairly valued Nature of stock   Defensive Aggressive Defensive Defensive Defensive Find the mean for T-Bills showing all workings

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
icon
Related questions
Question
   

% Return on T-Bills, Stocks and Market Index

State of the economy

Probability

T-Bills

Phillips

Pay -up

Rubber-made

Market Index

Recession

0.2

7

-22

28

10

-13

Below Average

0.1

7

-2

14.7

-10

1

Average

0.3

7

20

0

7

15

Above Average

0.3

7

35

-10

45

29

Boom

0.1

7

50

-20

30

43

Mean

 

 

16.9

2.07

19.60

15

Standard Deviation

 

0

23.4

15.62

18.92

17.71

Coefficient of Variation

 

0

1.39

7.55

0.97

1.18

Covariance with MP

 

0

0.04

-0.3

0.02

0.03

Correlation with Market Index

 

0

1

-1.0

0.69

1

Beta

 

0

1.32

-0.88

0.74

1

CAPM Req. Return

 

7

17.54

-0.02

12.89

15.0

Valuation (Overvalued/Undervalued/Fairly valued)

 

Fairly valued

Overvalued

Undervalued

Undervalued

Fairly valued

Nature of stock

 

Defensive

Aggressive

Defensive

Defensive

Defensive

Find the mean for T-Bills showing all workings

Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Risk and Return
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education