Question

Expected return and standard

deviation

a. What is the expected return of asset​ J? 

Return on
Return on
Asset K in
Return on
State of
Probability
Asset J in
Asset L in
Economy
of State
State
State
State
Вoom
0.26
0.050
0.190
0.250
Growth
0.38
0.050
0.100
0.190
Stagnant
0.21
0.050
0.030
0.080
Recession
0.15
0.050
- 0.070
- 0.190
Expand
Transcribed Image Text

Return on Return on Asset K in Return on State of Probability Asset J in Asset L in Economy of State State State State Вoom 0.26 0.050 0.190 0.250 Growth 0.38 0.050 0.100 0.190 Stagnant 0.21 0.050 0.030 0.080 Recession 0.15 0.050 - 0.070 - 0.190

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

Phases of Portfolio Management

Portfolio Theories

Related Finance Q&A

Find answers to questions asked by students like you.

Q: A personal account earmarked as a retirement supplement contains $342,200. Suppose $300,000 is used ...

A: Information Provided: Retirement Supplement = $342,000 Amount used to establish annuity = $300,000 I...

Q: Throughout the 1990s, the equity premium fell considerably especially in the USA. One conceivable re...

A:   Equity premium is the difference between stock and risk-free returns. It is the additional return ...

Q: Calculate the yield to maturity on the following bonds.  A 9 percent coupon (paid semiannually) bon...

A: Dear student, as per Bartleby answering guideline, if a student post multiple question then an exper...

Q: Explain carefully how and why a decline in the required rate of return affects stock values and retu...

A: Required rate on stock decide value of stock because required rate depends on net income and capital...

Q: Bartlett Company's target capital structure is 40% debt, 15% preferred, and 45% common equity. The a...

A: Weighted Average Cost of Capital : It is average cost of capital of all capital on the basis of weig...

Q: Explain the functions of financial markets in details and discuss lengthily how financial markets co...

A: The roles performed by the financial markets have included the price determination where financial m...

Q: FFC is trying to establish its optimal capital structure. Its current capital structure consists of ...

A: Unlevered beta = levered beta  /  1+((1-taxrate)*D/E Unlevered beta = 1.50 / 1+((1-0.40)*0.25/0.75 U...

Q: A $13,000 loan is to be amortized for 10 years with quarterly payments of $414.98. If the interest r...

A: Loan Amount= $13,000 Period= 10 years Quarterly payments= $414.98 Interest rate= 5% compounded quart...

Q: Ahmad earned $475 last summer. He deposited this money in an account that pays an interest rate of 3...

A: The balance in account after 15 years is future value of $475 after 15 years. Future value is the va...

Q: Please help me my finance homework. Question: Assume that Facebook and Linkedin Companies have to de...

A: Growth-Share Matrix is a graphical planning tool for corporate and businesses where the company’s pr...

Q: You want to buy a $212,000 home. You plan to pay 15% as a down payment, and take out a 30 year loan ...

A: a) Amount of down payment = cost of house * % of down payment 

Q: Consider the following probability distribution of returns for Alpha Corporation: Current Stock ...

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for yo...

Q: Calculate the present value of $5,000 received five years from today if your investments pay 6 perc...

A: Amount =$5000 Period =5 years  2  interest rate 6% compounding annually  Present value =5000/(1.06)5...

Q: May I have the step by step calculations for the following: Linke Motors has a beta of 1.30, the T-b...

A: according to SML model  firms required return =rf+beta ×rm-rf where, rf= risk free rate rm= market r...

Q: Capital Bhd. just paid a dividend of RM2.00 per share on its stock. The dividends are expected to gr...

A: The Stock Price is that price of the stock at which the stock is listed on the recognized stock exch...

Q: Margaret's Bakery is considering a replacement of their baked goods display cases. The current cases...

A: After tax cashflow = Sell Price - Tax paid on capital gain + tax saved on capital loss 

Q: Assume that you just inherited an annuity that Will pay you 10,000 per year, with the first payment ...

A: When repeated payments are made at the beginning of a specific period, it is known as annuity due. T...

Q: In a maximal flow problem, a.the flow out of a node is less than the flow into the node. b.the numb...

A: In a maximal flow problem the number of arcs entering a node is equal to the number of arcs exiting ...

Q: Tan, a money changer speculate in foreign currency as his business. On October 1, 2014, Tan bought a...

A: Forex  gain or loss recognized = Spot price after 180 days - Forward price at the time of purchase  

Q: I want to learn part a-b and e answers and my answers for c-d-f is correct ı checked them.Thanks a l...

A: NET PRESENT VALUE : Present value of cash inflow - present value of cash outflow. IRR : rate of retu...

Q: Yuehua Telecom Inc. and Guangxin Technology Ltd. are two competing ICT corporations based in Shenzhe...

A: Debt to equity ratio=Outsiders' fundsShareholders' funds Year Yuehua Telecom Inc.  Guangxin Techn...

Q: Calculate the future value in five years of $5,000 received today if your investments pay. 6 percent...

A: Future value =Present value *(1+rateper period)^n Where, n = no. of compounding period

Q: Calculate the fair present values of the following bonds, all of which pay interest semiannually, ha...

A: Bond’s value is the present value of the all future cash flows from the bond. To find the present va...

Q: 10) see picture

A: according to gordon's growth : Pi=Di+1r-g where, Pi= price at year i DI+1= Dividend at year i+1 r= r...

Q: Click here to read the eBook: Analysis of an Expansion Project REQUIRED INVESTMENT Tannen Industries...

A: To know whether a project is profitable or not, project will be evaluated. To evaluate the project, ...

Q: ABC Pvt. Ltd. is considering two mutually exclusive capital investments. The project’s expected net ...

A: NPV : Net Present Value is the net of present value of future cash inflow and outflow at the discoun...

Q: 1) see picture

A: Formula for calculating dividend is: Dn = Dn-1*(1+g) Where D is the dividend N is the time period g ...

Q: Please answer d part Question 3. Stocks A and B have the following historical returns:Year Stock ...

A: Portfolio means the collection of securities. It is a collection of various assets. It consist of fi...

Q: Assume that you are a financial advisor to the CEO of a large conglomerate that has various business...

A: Finance is the blood of business, if the proper flow of finance is not there in the business, it wil...

Q: What elements and dynamics may have led to a drop in the required rate of return?

A: Required rate of return is the minimum rate of return that an investor expects while investing in a ...

Q: Covers book store showed the following operating budget for next year: Sales were $1942217, t Fixed ...

A: Variable cost =$1210000 Fixed cost =$450000 Variable cost decrease by 10% Now variable cost  New var...

Q: Your uncle named you beneficiary of his life insurance policy. The insurance company gives you a cho...

A: Using excel rate function to calculate rate of annuity 

Q: Choose a,b,c,d,e for the following: Question 2- From a tax-paying investor's point of view, a stock...

A: Introduction: Stock repurchases ensures that by buying outstanding shares of its own stock, a corpor...

Q: Please show working   Please answer ALL OF QUESTIONS 1 AND 2   1. A bond has a $1,000 par value, 10 ...

A: Part 1: a.  Computation of yield to maturity is computed by using the following formula as follows: ...

Q: Suppose you inherited 100,000 and invested it at 7% per year   What's the most you can withdraw if t...

A: Using excel PMT function 

Q: You manage a risky portfolio with an expected rate of retum of 17% and a standard deviation of 35%. ...

A: The investment proportions of your client's overall portfolio is as under-

Q: Determine the value at the end of five years of a $7,000 investment (today) in a bank certificate of...

A: Future Value = Present Value * (1+rate)^n Where, Rate = 9%/2 = 0.045 n = no. of compounding period =...

Q: You are a young personal financial adviser. Molly, one of your clients approached you for consultati...

A: A bank certificate of deposit, a savings account, or a loan offer may be advertised with its nominal...

Q: How much would you have to pay into an account at the beginning of every six months to accumulate $1...

A: To calculate the semi annual payment made we will need to first calculate the semi annual rate at wh...

Q: Oleck Inc. produces stereo components that sell at P = $100 per unit. Oleck’s fixed costs are $200,0...

A: Click to see the answer