Fin- correlation related multiple problems

 

Q1Based on the following information:

 

  

 

State of Economy

Probability of 
State of Economy

Rate of Return
if State Occurs

  Depression

.12

−.103

  Recession

.23

.061

  Normal

.47

.132

  Boom

.18

.213

 

  

 

Calculate the expected return. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

 

  

 

  Expected return

[removed]  %

 

  

 

Calculate the standard deviation. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

 

  

 

  Standard deviation

[removed]  %

 

 

 

Q2.Consider the following information:

 

  

 

 

 

Rate of Return if State Occurs

  State of

Probability of

  Economy

State of Economy

Stock A

Stock B

Stock C

  Boom

 

.15

 

 

.37

 

 

.47

 

 

.27

 

  Good

 

.45

   

.22

   

.18

   

.11

 

  Poor

 

.35

 

.04

 

.07

 

.05

 

  Bust

 

.05

 

.18

 

.22

 

.08

 

 

  

 

a.

Your portfolio is invested 20 percent each in A and C, and 60 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))

 

 

 

  Expected return

[removed] %  

 

  

 

b1.

What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places. (e.g., 32.16161))

 

 

 

  Variance

[removed]  

   

 

 

 

b2.

What is the standard deviation? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))

 

 

 

  Standard deviation

[removed] %  

 

 

 

 

 

Q3.Stock Y has a beta of 1.8 and an expected return of 18.2 percent. Stock Z has a beta of 0.8 and an expected return of 9.6 percent. If the risk-free rate is 5.2 percent and the market risk premium is 6.7 percent, the reward-to-risk ratios for stocks Y and Z are [removed] and [removed] percent, respectively. Since the SML reward-to-risk is [removed] percent

 

Q4. Based on the following information:

 

  

 

  State of
 Economy

Return on
Stock A

Return on
Stock B

  Bear

.107

−.050

  Normal

.110

.153

  Bull

.078

.238

 

  

 

Assume each state of the economy is equally likely to happen.

 

  

 

Calculate the expected return of each of the following stocks. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

 

  

 

Expected return  

  Stock A

[removed]%

  Stock B

[removed]%

 

  

 

Calculate the standard deviation of each of the following stocks. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

 

  

 

Standard deviation  

  Stock A

[removed]%

  Stock B

[removed]%

 

  

 

What is the covariance between the returns of the two stocks? (Negative amount should be indicated by a minus sign, Do not round intermediate calculation and round your final answer to 6 decimal places. (e.g., 32.161616))

 

  

 

  Covariance

[removed]  

 

  

 

What is the correlation between the returns of the two stocks? (Negative amount should be indicated by a minus sign, Do not round intermediate calculation round your final answer to 4 decimal places. (e.g., 32.1616))

 

  

 

  Correlation

[removed]  

 







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Enjoy 10% OFF today with the coupon code: best10