A stock’s returns have the following distribution:   Calculate the stock’s expected return, standard deviation, and the coefficient of variation.

Q: Answer the following by using mathematical calculations: a) Calculate the expected rate of return…

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

Q: what is the return of stock a what is the return of stockb what is the standard deviation on stock…

A: Given: tate Probability(P) Return A Return B Poor 40% -0.08 -0.15 Normal 35% 0.19 0.14 Good…

Q: An ideal value-relevant attribute is one for which the correlation coefficient of the values of the…

A: +1 correlation indicates positive correlation whereas -1 indicates negative correlation.

Q: The correlation of returns between A and B is:

A: Correlation: It is a measure of statistics that shows the degree to which two variables move in…

Q: Calculate the expected return for Stock media Prima and Stock Astro 2. Calculate the standard…

A: Probability (%) (1) Stock Media Prima(%) (2) Expected returns (3)=(1)×(2) Stock Astro (4)…

Q: What are the two components of most stocks’ expected total return?

A: Expected total return refers to the full return of an investment over a certain period of time.

Q: Assume the risk-free rate is 2%. Calculate the stock's expected return, standard deviation,…

A: Expected rate of return on stock is that rate which an investor can expect to be generated from the…

Q: each stock. Which stock is most desirable according to this measure? (b) Compute the standard…

A: (Since you have posted multiple sub-part questions, we will solve the first three questions for you.…

Q: What does the meaning of maximum and minimum price in the stock performance graph? how to know which…

A: Succinctly summarized, a stock chart is a graph that illustrates the price of a stock over a certain…

Q: A stock's standard deviation determines how the stock affects the riskiness of a diversified…

A: The standard deviation measures total risk and beta measures the market risk. The statement mentions…

Q: The table below is a correlation matrix for Shares A, B and C. Each cell in the table shows the…

A: Investing in negatively correlated stocks indicate that one stock moves in the opposite direction as…

Q: a. Construct a price-weighted index for these three stocks, and compute the percentage change in the…

A: Price-Weighted Index = Sum of All Prices/Number of Stock Value-weighted Index = Total Value of…

Q: The historical rate of return on stock A was regressed on the rate of return of stock M (the…

A: Solution- Total variance of security =standard deviation of security^2…

Q: Determine graphically the beta coefficients for Stocks A and B. b. Graph the Security Market Line,…

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

Q: The table below contains the covariance matrix of stock returns and the market. Assume that the…

A: Risk is the possibility of loss for an organization and risk management is one of the most important…

Q: Suppose the beta estimated from the CAPM for stock A is 2.3 and stock B  is 1.1.   What is the beta…

A: CAPM stands for the Capital Asset Pricing Model. It defines the relationship of the systematic risk…

Q: Stocks A and B have the following returns: (Click on the following icon o in order to copy its…

A:

Q: If markets are efficient, what should be the correlation coefficient between stock returns for two…

A: Answer: In efficient markets, securities prices rapidly adapt to any new information coming into the…

Q: beta for a stock

A: Introduction: Beta can be defined as a metric which helps in measuring the volatility of a stock…

Q: А. Compute the standard deviation of each stock. В. What is the covariance and correlation…

A: The mathematical measure of market uncertainty is the standard deviation. In stocks the standard…

Q: Using multi-period Binomial model derive the expression for the probability with which the price of…

A: The Black Scholes model and Binomial model are used for the option pricing under option pricing…

Q: What is the standard deviation of stock A if it has the following probabilities and rate of returns.…

A: Expected return can be defined as the weighted average of the distribution of probable returns of…

Q: What is a characteristic line? How is this line usedto estimate a stock’s beta coefficient? Write…

A: Characteristic line With the help of regression analysis, a straight line is being formed which…

Q: how do you calculate a stocks average monthly return,its return variance ,standard deviation and…

A: Variance is a measure of risk of returns, it shows how much actual return has deviated from its…

Q: What is the correlation coefficient of the returns of the stock and the returns of the market?

A: Correlation: It is a measure of statistics used to show the degree of association between two…

Q: a. what is return on each of the three shortlisted stock? and what is the standard deviation of the…

A: Here, Probability of Recession is 70% Probability of Normal is 20% Probability of Boom is 10%

Q: If the correlation between two stocks is .49 and the standard deviation of both stocks are 39% and…

A: Covariance between two stocks = Correlation between stocks *Standard deviation of stock 1*Standard…

Q: Is the following statement correct, wrong or partially correc? Why? "If the volatility of Stock A is…

A: This statement is CORRECT.

Q: the variance of stock A is .004, the variance of the market .007 and the covariance between the two…

A: Given that the variance of stock A is 0.004, and variance of the market is 0.007. First we need to…

Q: What are the components of the risk-free rate and What is financial risk? If the standard deviation…

A: According to the rule, because you have posted multiple questions, we will answer the first question…

Q: The interpretation of stock beta coefficient requires an assumption of an average stock which has a…

A: Beta is a measure of a security's systematic risk which cannot be diversified and measures the…

Q: Stock A and B have the following probability distributions of expected future returns: Probability…

A: Answer: Expected rate of return for stock A is 15%. Standard deviation of stock B is 24%.

Q: h) If the standard deviation of a stock’s return is 5% and its expected return is 8%, what it the…

A: given, rstock = 8%σstock =5%

Q: What is the expected return for stock A?

A: Expected Return: It is computed by the sum of individual returns proportionately weighted by each…

Q: Determine graphically the beta coefficients for Stocks A and B. b. Graph the Security Market Line,…

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

Q: What is the standard deviation of Stock B returns given the information below about its returns…

A: Standard Deviation: Standard deviation is a measure of the dispersion of a set of data relative to…

Q: How can the model be used to estimate the predicted return ona stock?

A: Predicted rate of return: Predicting a rate of return is the method of calculating future rate of…

Q: The standard deviation of a stock’s return is a measure of its?   Multiple Choice   systematic…

A: Financial management consists of directing, planning, organizing and controlling of financial…

Q: What is the coefficient of variation for stock A?

A: Information Provided: Stock A expected return = 8% Stock A risk = 6%

Q: Stock X has the following data. Assuming the stock market is efficient and the stock is in…

A: The Constant Growth Model was developed by Gordon. This method assumes that a company grows at a…

Q: You are given the following probability distribution for a stock: Probability…

A: Calculation of expected return, standard deviation and coefficient of variation using excel is as…

Q: When finding the covariance, should 2 stocks be used or can it be calculated using 1 stock and the…

A: Covariance is referred as the statistical toll, which helps in determining the relationship between…

Q: Calculate and interpret the correlations between the two assets

A: Correlation of two assets helps to determine the relation between the two assets. The correlation…

Q: Fundamental analysis is a method of______________________________to determine intrinsic value of the…

A: Fundamental analysis measures a stock's or security's intrinsic value by using various economic or…

Q: Stocks A and B have the following probability distributions of expected future returns:…

A: Probability Return Expected return A B C=A*B 0.1 -20% -2.00% 0.2 7% 1.40% 0.4 15% 6.00%…

Q: Given the following information, determine which beta coefficient for stock A is consistent with…

A: Expected return (rs) = 10.1% Risk free rate (rRF) = 3.2% Market return (rM) = 11.2%