Based on the following probability distribution, what is the security's expected Expected Return 11-1 return? Probability State -5.0% 0.2 0.3 10.0 3 30.0 0.5
Q: Using the following data: Scenario Probability return K1 return K2 0.2 -10% 5% W2 0.4 0% 30% W3 0.4…
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Q: Expected Return 11-1 Based on the following probability distribution, what is the security's…
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Q: 1. A security has an expected rate of return of 0.11 and has a beta (B) of 1.5. The risk-free rate…
A: 1) Expected return = 11% Beta = 1.5 Risk free rate (Rf) = 5% Market return (Rm) = 9%
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A: Calculations of expected return and standard deviation: Excel workings:
Q: Based on the following probability distribution, what is the security’s expected return? State…
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A: Security Beta Expected return Pearl 0.9 17% Emerald 1.2 17%
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A: Information OUTCOME PROBABILITY EXPECTED RETURN A 20% 20% B 80% 25%
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Q: Based on the following probability distribution, what is the security's expected return? State…
A: Formula: Expected return = Specific probability * Specific return or pay off
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A: State Pr i rM rJ 1 0.3 −10% 40% 2 0.4 10 −20 3 0.3 30 30
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Q: Given the following probability distribution of returns: Probability Return 0.1 -15.0%…
A: Probability Return 0.1 -15.00% 0.25 0.00% 0.3 8.50% 0.25 12.00% 0.1 32.00%
Q: If the risk-free rate is 7.0%, the market risk premium is 11.0%, and the expected return on Security…
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- Security A has an expected return of 7%, a standard deviation of returns of 35%, a correlation coefficient with the market of −0.3, and a beta coefficient of −1.5. Security B has an expected return of 12%, a standard deviation of returns of 10%, a correlation with the market of 0.7, and a beta coefficient of 1.0. Which security is riskier? Why?Based on the following probability distribution, what is the security’s expected return? State Probability r 1 0.2 –5.0% 2 0.4 10.0 3 0.4 30.0Given the following probability distributions, what are the expected returns for the Market and for Security J? Statei Pr i rM rJ 1 0.3 −10% 40% 2 0.4 10 −20 3 0.3 30 30 Group of answer choices 10.0%; 11.3% 9.5%; 13.0% 10.0%; 9.5% 10.0%; 13.0% 13.0%; 10.0%
- Given the following probability distributions, what are the expected returns for the Market and for Security J? Statei Pr i rM rJ 1 0.3 −10% 40% 2 0.4 10 −20 3 0.3 30 30Security A has the following probability distribution of returns:Scenario Probability Return1] 0.1 15%2] 0.8 25%3] 0.1 35%What is the variance for Security A?A 0.002B 0.020C 0.200D 0.300Given the following probability distribution, what is the standard deviation of returns for Security J? (Expresss your answer in percentage, but do not include the percent sign, %, i.e., 4.65) State Pi rJ 1 0.2 6 % 2 0.6 11 3 0.2 17
- Based on the following table, compute the reward-to-risk ratio for security Pearl if the risk-free rate is 5%. Security Beta Expected Return (%) Pearl 0.9 17 Emerald 1.2 20What is the Variance of returns for Security XYZ? (no rounding off until the final answer, final answer at 5 decimal places “X.XXXXX”) the following probability distribution for security XYZ is determined: OUTCOME PROBABILITY EXPECTED RETURN A 20% 20% B 80% 25%Expected return of the X security is 12% and its standard deviation is 20%. Expected return of the Y security is 15% and its standard deviation is 27%. If, the correlation coefficient of the two securities is 0.7; then, what is the covariance between these two securities? A) 0.038B) 0.070C) 0.018D) 0.013E) 0.054
- Given the following probability distribution of returns: Probability Return 0.1 -15.0% 0.25 0.0% 0.3 8.5% 0.25 12.0% 0.1 32.0% what is the expected return?Which of the two securities are the best? By using probability estimates, below is the computation of ff. statistics: Statistic Security A Security B Expected return Standard deviation 12% 20% 8% 10% Requirement Calculate the coefficient of variation for each security Explain why the standard deviation and coefficient of variation give different ranking of risk. Which method is superior and why?Security X has expected return of 14% and standard deviation of 22%. Security Y has expected return of 16% and standard deviation of 28%. If the two securities have a correlation coefficient of 0.8, what is their covariance? 0.049 0.038 0.018 0.013
