Return on Return on Asset K in Return on State of Probability Asset J in Asset L in Economy of State State State State Вoom 0.26 0.050 0.190 0.250 Growth 0.38 0.050 0.100 0.190 Stagnant 0.21 0.050 0.030 0.080 Recession 0.15 0.050 - 0.070 - 0.190

Explain different terms are used to refer to rate of return?

The marginal cost of an asset is equivalent to its EUAC. True or False?

Explain Measures of Variance and Risk?

Define residual value.

a)define market risk.       b)define delta-hedged position and describe delta hedging.      c)describe gamma hedging and vega hedging.       d)define and explain value at risk (VAR).       e)describe the analytical (variance-covariance) method of calculating VAR, and discuss its advantages and disadvantages.

Is the portfolio risk the weighted average of the variance or covariance?

What was the correlation between both return series?

Supposing the return from an investment has the following probability distribution   Return   Probability     R (%)   8                 0.2   10               0.2   12               0.5   14               0.1   Required: What is the expected return of the investment? What is the risk as measured by the standard deviation of  expected returns?

H Consider the three stocks in the following table. Pe represents price at time t, and Qe represents shares outstanding at time t Stock C splits two-for-one in the last period. Pe 81 41 82 lo 100 200 200 Rate of return P₁ 86 36 92 li 100 200 200 % P₂ 86 36 46 Required: Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. A market value-weighted index 2₂ 100 200 400