Given the following information below for Stock A, calculate its standard deviation 6. Where: wwwww pi Probability of some state į a (R-R)'xp mean il Ri = Expected return in state į Rmsa Expected return Economic State i pi Probability of some statei Ri= Expected return in statei Weighted Ri for each State .39 22% Вoom Normal 11% 60 Bust 21 3% Rmean (Sum Column for Stock A Expected Returnl Bring the answer you calculated for Rmean Expected return above and enter it in the correct column below the finish calculating the Standard Deviation. (Ri-Rmean* x pi State i (Ri-Rmean) (Ri - Bmean) pi= Ri = Rmean= 22% 39 Boom Normal 60 11% Bust 3% 21 Sum of Column = Variance) = Square Root of Variance Standard Deviation

Question
Given the following information below for Stock A, calculate its standard deviation
6.
Where:
wwwww
pi Probability of some state į
a (R-R)'xp
mean
il
Ri = Expected return in state į
Rmsa Expected return
Economic State i pi Probability of
some statei
Ri=
Expected return in
statei
Weighted Ri for
each State
.39
22%
Вoom
Normal
11%
60
Bust
21
3%
Rmean
(Sum Column for Stock A Expected Returnl
Bring the answer you calculated for Rmean Expected return above and enter it in the correct column
below the finish calculating the Standard Deviation.
(Ri-Rmean* x pi
State i
(Ri-Rmean) (Ri - Bmean)
pi=
Ri =
Rmean=
22%
39
Boom
Normal
60
11%
Bust
3%
21
Sum of Column = Variance) =
Square Root of Variance Standard Deviation
Expand
Transcribed Image Text

Given the following information below for Stock A, calculate its standard deviation 6. Where: wwwww pi Probability of some state į a (R-R)'xp mean il Ri = Expected return in state į Rmsa Expected return Economic State i pi Probability of some statei Ri= Expected return in statei Weighted Ri for each State .39 22% Вoom Normal 11% 60 Bust 21 3% Rmean (Sum Column for Stock A Expected Returnl Bring the answer you calculated for Rmean Expected return above and enter it in the correct column below the finish calculating the Standard Deviation. (Ri-Rmean* x pi State i (Ri-Rmean) (Ri - Bmean) pi= Ri = Rmean= 22% 39 Boom Normal 60 11% Bust 3% 21 Sum of Column = Variance) = Square Root of Variance Standard Deviation

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Finance

Other

Related Finance Q&A

Find answers to questions asked by students like you.

Q: Why are credits and debits different for banks compared for personal finance usage?

A: In personal account, all expenses, assets, and losses will be debited. All incomes, liabilities, and...

Q: Your company is currently considering two investment projects. Each project requires an upfront expe...

A: Payback period can be defined as the time length required by the project to recover the total cash o...

Q: Atlantic Corporation is the largest logging company in the north eastern part of the United States. ...

A: a) According to the information provided, dividends are declining at a rate of 5% per year. Dividend...

Q: You are the CFO of Oriole, Inc., a retailer of the exercise machine Slimbody6 and related accessorie...

A: Incremental cash flow at the beginning of the project = -( initial investment in the store + initial...

Q: Borrowed $500 for 1 year and paid $50.00 in interest. Bank charged $5.00 service charge. What id fin...

A: Finance charge:The finance charge is the overall sum of the amount of interest and loan charges that...

Q: A pension fund manager is considering three mutual funds.  The first is a stock fund, the second is ...

A: Calculation of Expected Return, Standard Deviation, Sharpe Ratio, Weight of Stock and Weight of Bond...

Q: Thrice Corp. uses no debt. The weighted average cost of capital is 9.9 percent. The current market v...

A: Weighted Average Cost of Capital = 9.9% or 0.099Market Value of the Equity = $18,500,000Tax Rate = 2...

Q: Thrice Corp. uses no debt. The weighted average cost of capital is 4.8 percent. If the current marke...

A: Earning before interest and taxes are calculated to determine the earnings of the company before tax...

Q: Need help figuring this out and setting up in Excel with formulas.

A: Payback period is the time when the cumulative cash flow turns out to be zero. Discounted payback pe...

Q: Which of the following best explains why a firm that needs to borrow money would borrow at long-term...

A: The short-term rates of interest are much volatile when compared to the long-term rates of interest....

Q: Consider a project to supply Detroit with 40,000 tons of machine screws annually forautomobile produ...

A: a.The cost of equipment is $5,600,000. So, annual depreciation will be ($5,600,000 ÷ 6) = $933,333.3...

Q: Consider the following annual returns of Molson Coors and International Paper:    MolsonCoors Int...

A: The average return, standard deviation and coefficient of deviation are calculated to select the com...

Q: The Lake Placid Town Council has decided to build a new community center to be used for conventions ...

A: a)Expected value approach: Excel computation: (In thousand dollars)The medium or large can be select...

Q: Which one of the following terms applies to a bond that can be exchanged for the issuing company's c...

A: Convertible bond or convertible debt is a type of bond that the bond holder can convert the bond int...

Q: You buy stock for $30 per share and sell it for $33 per share after holding it for slightly after a ...

A: Since the stock is held for more than a year, both income and capital gains will be taxed differentl...

Q: Chrome Co. borrows $1,665,000 at an interest rate of 7.32% APR monthly with equal monthly payments o...

A: Calculation of Loan Balance in Month 36:The loan balance in month 36 is $1,460,033.76.Excel Spreadsh...

Q: Company ABC just sold their most profitable division for $100 million in cash. The company has a mar...

A: A)(i) Initial Investment = $100 MillionPayoff is given for the next year with different probabilitie...

Q: Executives at XYZ Corporation realize that they have too much liquid assets. They want to use this c...

A: Expected return E(R) and standard deviation σ are given by the expressions on the white board. Pi is...

Q: What is Internal Rate of Return - Monthly Fixed Cash Flows with Reversions?  Please provide examples...

A: The internal rate of return is the one of the discounted techniques of capital budgeting which is us...

Q: You would like to have $72,000 available in 15 years. There are two options. Account A has a rate of...

A: Let A and B be the amount to be deposited in Account A and Account B respectively to get the desired...

Q: Ginger Brown has a take-home pay of $700 a week. Her disability insurance coverage replaces 70 perce...

A: Calculate the amount would she receive in disability benefits as follows:

Q: Q3. Company ABC just sold their most profitable division for $100 million in cash. The company has a...

A: Hi, since there are multiple questions posted, we will answer the first question alone. Kindly repos...

Q: Explain the disadvantages and dangers of Home Equity Loans.

A: The disadvantages of home equity loans:Higher rate of interest: The interest rates are typically hig...

Q: MMS Corp borrows $1,650,000 today for a new building. The loan is an equal principal payment loan wi...

A: Calculation of Current Portion of Debt in Month 16:The current portion of month debt 16 is $183,333....

Q: The past five monthly returns for PG&E are −3.55 percent, 4.83 percent, 4.15 percent, 7.04 perce...

A: Calculation of Standard Deviation of PG&E’s monthly return using STDEV.S function of excel:To op...

Q: 6:05 IMG_0742.jpg X Wildhorse Company is considering buying a new farm that it plans to operate for ...

A:  Net present value (NPV): Net present value is one of the most applicable capital budgeting techniqu...

Q: Is there an easily identifiable debt-equity ratio that will maximize the value of a firm?

A: Theoretically, there exists a debt equity ratio at which the value of the firm gets maximized. Howev...

Q: Venus, Inc. has an issue of 9% preferred stock outstanding which pays annual dividends.  If this iss...

A: Calculate the required return as follows:

Q: Wildcat engineering decides to take a $10,000 interest only lona. The loan is to be paid montly over...

A: Interest only loan can be described as the loan on which borrower only pays the interest payments du...

Q: As requested, I include full question. only need answer part d) https://www.bartleby.com/questions-a...

A: Hence, WACC before debt is 10%, and is determined by multiplying cost of equity capital with weight ...

Q: Imprudential, Inc., has an unfunded pension liability of $582 million that must be paid in 20 years....

A: To find out the value of the pension liability, the amount will be simply discounted to its present ...

Q: Please show all equations and work as needed. Make the correct answer clear. If possible, please typ...

A:  As requested, I have typed the calculations for your convenience.The company sold 4 million of prim...

Q: Q1. Consider an all-equity firm that is contemplating going into debt. The market value of equity is...

A: Weighted average cost of capital (WACC) refers to the rate which a firm is expected to  pay to its s...

Q: what is the formula for compounding interest?

A: Compound interest can be defined as the interest earned on principal amount and on all previous inte...

Q: #60

A: Calculation of future value of payments:Answer:Future value of payments is $185,360.20; the policy i...

Q: Using a MARR of 12%, find the external rate of return (ERR) for the following cash flow. Is this pro...

A: Calculation of ERR:ERR is 10.89%Present value of cash flow (outflow),

Q: If you deposit money today in an account that pays 4%annually interest. How long will it take to dou...

A: Let's Say, one deposited $50,000 at 4% pa, you want it to become 1,00,000, one needs to follow the p...

Q: For technical analysis, based on patterns of historical prices, to have value, ______ form of market...

A: Weak form efficiency market hypothesis is an element of efficient market hypothesis which states tha...

Q: Camber Corporation has to decide if they can finance purchasing 10 new machines for all their manufa...

A: a)Calculation of annual payments:Answer:The annual payment is $3,417,453.45.The actual cost of each ...

Q: A mining company in South Africa has discovered a new gold vein in a mountain 150 kilometers north o...

A: 1) To set up a new a mine in a mountain which is 150 kms north of Johannesburg, the company would sp...

Q: Try to calculate the effective interest rate for a $1789 simple discount note at 5.25% for 15 months...

A: Computation of the effective interest rate:Hence, the effective interest rate is 5.62%.

Q: Q2)   Suppose the current one-year euro swap rate y0[0, 1] is 1.74%, and the two-yearand three-year ...

A: Meaning of Euro swap rate:A swap rate is the fixed rate that a receiver demands, in exchange for unc...

Q: Rank the following three stocks by their total risk level, highest to lowest. Night Ryder has an ave...

A: Calculation of the Total Risk Level of Night Ryder Stocks, WholeMart Stocks and Fruit Fly Stocks usi...

Q: Determine the periodic deposit. round to the nearest dollor. Rate 5% compounded annually time 18 yea...

A: Calculation of Periodic Deposit: The periodic deposit is $5,331.93.Excel Spreadsheet:

Q: The price of a home on a particular island is $1,000,000. The bank requires a 15% down payment and 3...

A: Hi! Thank you for the question. I am solving the Question for first 3 sub-parts as you have posted t...

Q: 7 Bond A's is a 15 year bond with current price is $933 and it has an $80 annual coupon. Bond B's is...

A: a) Bond A has an annual coupon of $80, current price $933 and 15 years to maturity.Yield to maturity...

Q: Automobiles had an average cost of $16,000 in 2013. Average cost of the same automobiles now is $20,...

A: Calculation of rate of increase for the automobiles between 2 time period: Rate of increase for the ...

Q: The average annual return on the S&P 500 Index from 1996 to 2005 was 13.27 percent. The average ...

A: Calculation of market risk premium:Answer:The average market premium in these ten years is 9.35%

Q: The largest type of municple bonds outstanding is: A. revenue bonds. B. Industrial development bonds...

A: Municipal Bonds:Municipal bonds are those bonds which are issued by local or state government of a c...

Q: You are a management trainee in one of the Manufacturing companies based in Johor, Malaysia. The com...

A: It is extremely hard to measure financial cost and other direct and indirect costs; consequently dis...