Qarshi Industries is a very well-profiled Company in financial markets of Pakistan. The company is confused about its investments during January effect. Help the company in estimating the risk and return of the company investments. For Qarshi Industries, the market and Stock J have the following probability distributions: Probability Rm Rj 0.3 15% 10% 0.4 9% 5% 0.3 8% 12% Calculate the expected rates of return for the market and Stock J. Calculate the standard deviations for the market and Stock J. Calculate the variance for the market and Stock J. Identify market anomaly, briefly discuss with example. Differentiate between Average return and Geometric return, elaborate with the mathematical description of
Qarshi Industries is a very well-profiled Company in financial markets of Pakistan. The company is confused about its investments during January effect. Help the company in estimating the risk and return of the company investments. For Qarshi Industries, the market and Stock J have the following probability distributions: Probability Rm Rj 0.3 15% 10% 0.4 9% 5% 0.3 8% 12% Calculate the expected rates of return for the market and Stock J. Calculate the standard deviations for the market and Stock J. Calculate the variance for the market and Stock J. Identify market anomaly, briefly discuss with example. Differentiate between Average return and Geometric return, elaborate with the mathematical description of
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 14P
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Qarshi Industries is a very well-profiled Company in financial markets of Pakistan. The company is confused about its investments during January effect. Help the company in estimating the risk and return of the company investments. For Qarshi Industries, the market and Stock J have the following probability distributions:
|
Probability |
Rm |
Rj |
|
0.3 |
15% |
10% |
|
0.4 |
9% |
5% |
|
0.3 |
8% |
12% |
- Calculate the expected
rates of return for the market and Stock J. - Calculate the standard deviations for the market and Stock J.
- Calculate the variance for the market and Stock J. Identify market anomaly, briefly discuss with example.
Differentiate between Average return and Geometric return, elaborate with the mathematical description of each
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