Assume an initial starting Ft of 300 units, a trend (Tt ) of eight units, an alpha of 0.30, and a delta of 0.40. If actual demand turned out to be 288, calculate the forecast for the next period.

Q: The exercise price of an asset in one (1) year is ₱75 and its variance (σ 2 ) is 0.64. The current…

A: Here, Exercise Price is ₱75 Current Price is ₱65 Variance is  0.64 Reference Rate or Risk Free Rate…

Q: Suppose that the price of corn is risky, with a beta of .5. The monthly storage cost is $.03 per…

A: In order to store the corn for three months, we have to find the price after the period. That price…

Q: Use the means and standard deviations of return for MSFT and TSLA in percent per month that are…

A: Opportunity set is the set of all possible portfolios that an investor may construct from a given…

Q: The following information is available for the price of materials used at P Co. Laspeyre index for…

A: We have the following information:  Laspeyre index for price in 20X5 (with base year of 20X0):…

Q: The returns of Omantel for the last four years are Year 1=21, Year 2=10, Year 3=5, Year 4=(-2). The…

A: A stock is a financial security issued by a corporation. The return on a stock represents return…

Q: Here are alphas and betas for Company X and Company Y for the 60 months ending April 2019. Alpha is…

A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: The expected price of an in one (1) year is ₱75 and its variance (σ2) is 0.64. The current price of…

A: The Formula used is shown:

Q: (a) If the return on investment earned by a manufacturer of a sport car for four successive years…

A: The average mean rate of return is computed by dividing the sum of all the returns from the number…

Q: If an investment company had revenue of its investment of $30000 and expected to increase at the end…

A: Given that the revenue of an investment of an investment company is $30000 and it is expected to…

Q: It is November 2019. The following variance -covariance matrix, for the market (S&P 500) and stocks…

A: Alpha on a stock is the return over an above the minimum expected rate of return. A positive alpha…

Q: If that 55% return on investment (ROI) occurs over a decade, r = .55 and n = 10, so the annualized…

A: Return on investment is defined as the return generated by investment as a percentage of investment.…

Q: Over the past 3 years an investment returned 0.15, -0.1, and 0.06. What is the variance of returns?…

A: Introduction:- The commitment of an asset to improve in value over time is referred to as…

Q: Each day, a certain stock has an expected increase of $0.04 with variance of $0.10. By calculating,…

A: A stock is a sort of financial instrument that indicates the holder owns a share of the issuing…

Q: Please calculate the Sharpe measure for the S&P 500 over the last ten years if the standard…

A: Sharpe Ratio or Sharpe measure of a security = Return in excess of risk free rate / Standard…

Q: solve for annualized log-return and annualized volatility of log returns. Last end of day value was…

A: Log Return is required for Statistical Evaluation, If we are having an Average Daily log Return…

Q: The probability distribution of possible net present values for project X has an expected value of…

A:

Q: Your rate of return expectations for the stock of Gidimadjor Company during the next year are…

A: As per Q&A guidelines, We will answer first three subparts when multiple subparts given under…

Q: Over the past 3 years an investment returned 0.19, -0.11, and 0.07. What is the variance of returns?

A: Variance: Variance is the measure of dispersion of returns of an investment.

Q: Suppose financial analysts believe that there are four equally likely states of the economy:…

A: Expected return is the sum product of return and their respective probability. E(ri) = ∑pi*ri…

Q: The expected price of an in one year is $75 and its variance (σ 2) is 0.64. The current price of the…

A: Formula used is shown:

Q: Expected Return, Variance, Std. Deviation and Cofficient of Variation: Magee Inc.'s manager believes…

A: The standard deviation of the stock is the measure of the deviation of the stock's return from the…

Q: The following table shows the one-year return distribution of Startup, Inc. Calculate: 1. The…

A: The expected return is the benefit or loss that an investor may derive from a given investment. An…

Q: 4. The Sales manager of a company projected the following sales for the next year with the following…

A: Variance Variance is the spread of numbers between a set of data. It measures how far a number is…

Q: The JCI Index showed the following Rs for a 6-year period: 11.1%, -5.2%, 20.3%, 26.7%, -12.4%, and…

A: Arithmetic return and geometric return are measures of central tendencies.

Q: "A security with normally distributed returns has an annual expected return of 15% and standard…

A: Given: Annual expected return μ=15% Population standard deviation σ=9%

Q: Consider the following time series data: a. Compute MSE using the most recent value as the forecast…

A: Mean Squared Error Using Most Recent Value   The formulae and answers is provided in the below…

Q: Consider the following information regarding a new investment that a company intends to undertake:.…

A: Calculation of standard deviation and variance of each return: Excel workings:

Q: The following numbers were randomly generated from a standard normal distribution: -0.25    0.3…

A: The formula for simulated price,S based on the initial closing price of S0 will be given by the…

Q: Using the graph, answer the following standard deviation questions: 1. As the standard deviation for…

A: Hi, thanks for your question. “You have posted multiple sub-parts in this question. As per our…

Q: Based on a 90% confidence level, how many exceptions in backtesting a VAR would be expected over a…

A: On a 90% confidence level, no. of exceptions in backtesting a VAR that can be expected over a…

Q: There are two projects, A and B. the following probability distribution for the projects are given…

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

Q: Given the data​ here, Compute the average return for each of the assets from 1929 to 1940 (the…

A: Risk and return are two important factors of any investment. Return means earning through investment…

Q: Your rate of return expectations for the stock of Kayleigh Cosmetics Company during the next year…

A: Expected return shows possible return from the stock and standard deviation shows risk assign in…

Q: Table 6-1. Actual Sales Data Time Actual Period Sales 345 378 425 4 450 470 6. 500 7 532 8. 548 9…

A: Forecast by using Exponential smoothing is calculated by using the following formula: Ft = αDt-1 +…

Q: Using 625 trading days of data, you estimated the daily log return follows a normal distribution…

A: “Hi, as per our policy we will answer the first three parts of the question. Kindly repost the…

Q: Over the past 3 years an investment returned 0.15, -0.1, and 0.05. What is the variance of returns?

A: Investments are the techniques through which an individual invests or parks his/her money or funds…

Q: . A manager is using the equation Y(t) = 6400 + 70t to forecast quarterly demand for a product. In…

A: The following calculations are done by the manager to get the result of forecasts of the last…

Q: The budget of a company for next period shows that it would breakeven at a sales value of GHC800000…

A: At break even, Fixed costs = contribution margin so, contribution margin = 320000 contribution…

Q: maintain PV of 100 with time(n) as 40 years and vary the rate(i) from 4% to 6% to 8% and 10% then…

A: The future Value of an investment is calculated as the sum of invested amount and interest earned…

Q: The expected price of an in one (1) year is ₱75 and its variance (σ 2 ) is 0.64. The current price…

A: Expected price in one year - ₱75  Variance  (σ 2 ) - 0.64 Current price of the asset - ₱65 Reference…

Q: A risk manager estimates daily variance o, using a GARCH model on daily returns u;: o? = w + auf-, +…

A: The GARCH model is a financial model that is used to measure and analyze different types of…

Q: The demand for a product during the next ten years will be such that revenues will be $100,000 the…

A:

Q: Assume that a project is expected to produce the following cash flows in each year, each periodic…

A: NPW FORMULA: NPW = -initial value +present value of future cashflow

Q: Expected Return, Variance, Std. Deviation and Cofficient of Variation: Magee Inc.'s manager believes…

A: A statistical measure that represents the variation in the return on the stock is term as the…

Q: 2. The rate of retum expectation for the common stock of ABC company đuring the next year are:…

A: Using excel

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.