А. Compute the standard deviation of each stock. В. What is the covariance and correlation coefficient between the two stocks?

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: a covariance of 0.011. If their respective standard deviations are 13% and 22%, what is their…

A: Given, Covariance = 0.011 Standard deviation of security 1 = 13% or 0.13 Standard deviation of…

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: Exercises: a. The standard deviation of returns is 0.30 for Stock A and 0.20 for Stock B. The…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

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: How do you calculate the Treynor ratio for the AMD stock?

A: Treynor ratio is referred to as the portfolio performance, which used to measure regarding 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 is the correlation between returns of stock S and T, given that covariance between stocks is…

A: Given, Covariance = 2.419 Standard deviation =1.23 and 2.21

Q: 1. The market and Stock A have the following probability distributions: Return on Return on…

A: Coefficient of Variation = Standard Deviation / Average Return

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: What is the standard deviation of Ava's stock, giving the following information: Year

A: Standard Deviation is a measure of statistics and measures the dispersion of the data relative to…

Q: ou are given the following information regarding prices for a sample of stocks. a. Construct a…

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

Q: Suppose that a stock portfolio and a bond portfolio have zero correlation. This means that..   The…

A: Correlation is a statistical indicator of the extent to which two securities are related in the…

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: A stock’s returns have the following distribution:   Calculate the stock’s expected return,…

A: Given:

Q: Which of the following shows the trade-off between expected profit (y-əxis) and in-stock probability…

A: The relationship between expected profit and probability is that for lower and higher expected…

Q: Stocks A B and C display the following parameters: Expected Return A  15%         Variance 9%2…

A: Expected return of A (Ra) = 15% Standard deviation of A (Sa) = Square root of variance = 3% Expected…

Q: Following is information for two stocks:   Investment    r        σ   Stock X        8%     10%…

A: Relative risk can be judged by comparing the coefficient of variation (CV) of both the securities.…

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: 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: Q3. Find the Expected Return, Variance, and Standard Deviation for the Stock Returns 1 and 2. Also,…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: nother stock from the same industry, namely CEB, has a Coefficient of Variation of 3.25. What is…

A: Solution : We are required to calculate the coefficient of variation We know , Coefficient of…

Q: What are the arithmetic and geometric returns for the stock?

A: Arithmetic and Geometric mean are used to calculate the expected mean of the stock Arithmetic Mean…

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: Stock A Stock B Market Standard Deviation Return Correlation Coefficient between A & M Correlation…

A: The Capital Asset Pricing Model(CAPM) refers to the relationship between expected return for assets…

Q: If two stocks have variance σ2=16 each, could their covariance be equal to σ12 = 20

A: It has been provided that the value of variance for two stocks is 16 . Thus, the standard deviation…

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: 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: 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: average monthly returnn, its return variance, standard deviation and betas

A: Average Monthly Returns: Average monthly returns are the amount which a firm expects to return from…

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: If two stocks have variance σ^2=16 each, could their covariance be equal to σ12 = 20

A: It has been provided that the value of variance for two stocks is 16 . Thus, the standard deviation…

Q: How do I calculate the weighted bias of stocks?

A: Weighted bias of stocks also known as the price-weighted stock index, where each and every stock of…

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: 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: Firm A's stock returns are correlated with market returns at 0.90, while Firm B's stock returns are…

A: Solution:- Beta means the sensitivity of stock with respect to market.

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%