Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 6.4 percent and the standard deviation was 12.4 percent. A. What range of returns would you expect to see 95 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) B. What range of returns would you expect to see 99 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Q: Use the following information on states of the economy and stock returns to calculate the standard…

A: Expected return = Probability * Return   Variance = Sum of( Squared deviation between return and…

Q: You've observed the following returns on Yamauchi Corporation's stock over the past five years:…

A: Information Provided: Return = -27.9%, 15.6%, 34.2%, 3.3%, 22.3%

Q: An investor recorded the following annual returns of one of his investments. You are required to…

A: The basic purpose of investment is to earn return on the invested capital. A rational investor will…

Q: Compute the standard deviation of the five monthly returns for PG&E: 1.25 percent, −1.50 percent,…

A: Standard Deviation is a measure of risk. In other words, It measures the extent of variability of…

Q: You find a certain stock that had returns of 15.2 percent, -22.6 percent, 28.6 percent, and 19,6…

A: Average is the sum of all stock returns divided by number of return. given, average =13.2% Let the…

Q: Over a particular period, an asset had an average return of 6.7 percent and a standard deviation of…

A: The expected return is the gain or loss that a trader predicts on a particular previous rate of…

Q: Over a particular period, an asset had an average return of 5.8 percent and a standard deviation of…

A: The range in statistics is used as a dispersion measuring tool that provides an interval not…

Q: A company has a beta of 1.4, the T-bill rate is 2.09%, and the expected return on the market is…

A: Beta = 1.40 Risk free rate = 2.09% Market return = 9.02%

Q: ver a particular period, an asset had an average return of 11.6 percent and a standard deviation of…

A: The expected range of returns refers to the range in which an investor expects the returns from an…

Q: Over the past 4 years an investment returned 0.1, -0.12, -0.08, and 0.13. What is the standard…

A: Return in year 1 is 0.1 Return in year 2 is -0.12 Return in year 3 is -0.08 Return in year 4 is 0.13…

Q: I. Consider a risky asset X. We suppose that the rate of return of the asset per year was observed…

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

Q: C). Your investment in A Limited earned the following returns for the years 1996 to 1999: 30%, 40%,…

A: Year Return 1996 30% 1997 40% 1998 15% 1999 7%

Q: Calculate the expected return. Do not round intermediate calculations. Round your answer to two…

A: The answers and the explanation can be seen below:

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 returns of Mazoon Company is as follows. Year 1=16, Year 2=(-11), Year 3=28, Year4=12. The…

A: Standard deviation refers to the variation or dispersion in the values of a data set. Standard…

Q: ou’ve observed the following returns on SkyNet Data Corporation’s stock over the past five years: 11…

A: We are provided with data of last 5 years in terms of rate of returns.  This is for SkyNet's stock…

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

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

Q: You've observed the following returns on Yamauchi Corporation's stock over the past five years:…

A: A. The arithmetic mean of a set of numerical values is calculated by adding them together and…

Q: Standard Deviation    %

A: To calculate the standard deviation, first we need to calculate the mean of the monthly returns:…

Q: The most recent estimate of the daily volatility of an asset is 1.75% and the price of the asset at…

A: Exponentially Weighted Moving Average model is used in finance for measuring volatility and for…

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: Consider an investment with the following probability distribution:   Probability Payoff 0.40 30.0…

A: Probability is the expectation or estimate which is forecasted. For calculation of expected return,…

Q: a. What is the expected return of each asset? b. What is the variance and the standard deviation of…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: What is the (exact) nominal return on an investment that earns a real return of 14.7% while…

A: Solution:- Nominal rate of return means the rate of return inclusive the effect of inflation.

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: Over a particular period, an asset had an average return of 6.3 percent and a standard deviation of…

A: From the perspective of finance, the concept of standard deviation can help investors to quantify…

Q: Over the past 4 years an investment returned 0.1, -0.12, -0.08, and 0.13. What is the standard…

A: Given information : Returns for past 4 years   Year Stock returns 1 0.1 2 -0.12 3 -0.08 4…

Q: Which one of the following best describes an arithmetic average return?

A: Arithmetic average return is the mean of all returns and hence is computed by adding all the returns…

Q: Suppose the returns on an asset are normally distributed. The historical average annual return for…

A: Here, Historical Average Annual Return is 5.7% Standard Deviation is 18.3%

Q: Assume that we have three assets.  The first one has expected return μ1 = 10% and standard…

A: Standard deviation of an asset denotes the variability in return of the asset. Higher will be the…

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: Over the past 4 years an investment returned 22%, -5%, -20%, and 9%. What is the standard deviation…

A: Standard Deviation is the deviation of statistical data from its mean. It is the square root of…

Q: You’ve observed the following returns on Yamauchi Corporation’s stock over the past five years:…

A: Period Return 1 -28.2% 2 15.8% 3 34.6% 4 3.4% 5 22.4%

Q: The expected value and the standard deviation of returns for asset A is   12.7% and 2.3% 12.7% and…

A: Expected return = Sum of weighted probability return. Standard deviation = Square root of variance.

Q: Suppose two asset returns are described by a two factor model, n- 0% + 11 + 1.8/2 + e 12= -1% + 21 +…

A: Here, Volatility of First Factor is 30% Volatility of Second Factor is 10% Correlation between two…

Q: Use the following information to compute the standard deviation of returns:   Yearly Returns Year…

A: To Find: Standard deviation of returns

Q: Over a particular period, an asset had an average return of 5.2 percent and a standard deviation of…

A: In we have to use 95% confidence interval to get the range.

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: Yearly Returns Year Return (%) 1 19 2 1 3 10 4 26 5 4   a. 12% b. 10.42% c. 0.87% d. 108.5%

A:

Q: onsider two different assets. Asset A has a mean expected return of 6% with a standard deviation of…

A: The given problem can be solved using the concept of coefficient of variation. Coefficient of…

Q: If the return on stock A in year 1 was 14 %, in year 2 was 19%, in year 3 was 17% and in year 4 was…

A: Financial management consists of directing, planning, organizing and controlling of financial…

Q: Macro Corporation has had the following returns for the past three years: -10 percent, 10 percent,…

A: YEAR RETURNS 1 -10% 2 10% 3 30%

Q: If the correlation between an asset and the market is 0.6, the standard deviation of the asset is…

A: The provided information is: Correlation between an asset and the market = 0.6 Standard deviation of…

Q: The data presented below represents the expected returns on a financial asset in different seasons…

A: Data given: Season of year Probability Return(%) Spring 0.40 0.02 Summer 0.35 0.06 Winter…

Q: What range of returns should you expect to see with a 99 percent probability on an asset that has an…

A: At 99% level, value of z = 3 Expected range of return = Average return + (Value of z * Standard…

Q: The expected value, standard deviation of returns, and coefficient of variation for asset A are…

A: To Find: Expected return Standard deviation COV

Q: What range of returns would you expect to see 68 percent of the time for this asset? (A negative…

A: The rate of return is the net gain or loss of an investment over a specific time period, represented…

Q: You find a certain stock that had returns of 14 percent, -21 percent, 22 percent, and 11 percent for…

A: Missing Return =(Average Return * 5) - (Total returns in 4 years)

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.