tate probability Return on A RETURN ON B POOR 40% -0.06 -0.09 NORMAL 35% 0.16 0.14 GOOD 25% 0.2 0.3 Weight a Weight b .4 .6 what is the return of stock a Answer for part 1 what is the return of stock b Answer for part 2 what is the standard deviation on stock a? Answer for part 3 what is the standard deviation on stock b? Answer for part 4 what is the coefficients of variation on stock a? Answer for part 5 what is the return of the portfolio? Answer for part 6 what is the covariance between a and b ? Answer for part 7 what is the correlation Answer for part 8 what is the standard deviation of the portfolio Answer for part 9

Q: Stock A has an expected return of 18% and a standard deviation of 38%. Stock B has an expected…

A: The Sharpe ratio is calculated as follows:   Subtract the risk-free rate from the return…

Q: Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 40% standard deviation of…

A: The coefficient of variation (CV), also known as relative standard deviation (RSD), is a normalized…

Q: Stock B Rate of Return    Probability              Rate of Return         Probability 14…

A: Expected return is return considering the probability of the return.

Q: Stock X Rate of Return (r) Probability (p) Optimistic 14 % 26 % or 0.26 The Economic Most Likely…

A: Given Data:   Rate of return(r) Probability(p) 14% 0.26 11% 0.70 -8% 0.04

Q: Finance What is the expected standard deviation of stock A's returns based on the information…

A: To Find: Standard Deviation

Q: A rates of return of asset and market have the following distribution: Steady of Economy…

A: 1) Computation:

Q: Quantitative Problem: You are given the following probability distribution for CHC Enterprises:…

A: Calculation: Formula snip:

Q: Quantitative Problem: You are given the following probability distribution for CHC Enterprises:…

A: Expected Return is the amount of loss or profit an investor expects to receive on an investment.…

Q: 3. The data below describe a three-stock financial market that satisfies the single-index model:…

A: We will apply the required formula to calculate the required output. Return can be calculated by…

Q: 1. Consider 3 stocks A, B, and C and the risk-free rate RF=0.5%. The logarithmic rates of return are…

A: Hi, since you have posted multiple questions and the first uestion has multiple sub-parts. We will…

Q: The covariance between stock A and market return is 135. The standard deviation of market’s return…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: 3. You have gathered average return and standard deviation data for five stocks (A-E). How have…

A: Coefficient of variation shows the risk -reward trade off between the return and risk of the stock…

Q: Characteristic Line and Security Market Line You are given the following set of data: Historical…

A: a) Beta co-efficient of a stock can be calculated using the formula as below:…

Q: EXPECTED RETURNS Stocks X and Y have the following probability distributions of expected future…

A: Here, Probability X Y 0.1 (10%) (35%) 0.2 2 0 0.4 12 20 0.2 20 25 0.1 38 45

Q: Use the following table of information: Stock X Stock Y Expected Return 14% 18% Standard Deviation…

A: Expected return is a way of calculating profit or loss anticipated by an investor on his investment…

Q: Stock A has a standard deviation of 20% and a beta of 0.6. Stock B has a standard deviation of 12%…

A: The portfolio beta is calculated as weight of stock multiplied by the respective beta

Q: Stocks A B and C display the following parameters: Expected Return A  15%         Variance 9%2…

A: Expected return of A (Ra) = 15% Standard deviation of A (Sa) = Square root of variance = 3% Expected…

Q: Consider the two (excess return) index model regression results for A and B:   RA = 0.8% + 1RM…

A: Residual standard deviation is measured by using the firm specific risk.

Q: 6. Consider stocks A and B with the following past returns: Month 1 2 4 A 7% 8% 4% 6% 4% 5% 8% 2% a.…

A: GIVEN, month A B 1 7% 4% 2 8% 5% 3 4% 8% 4 6% 2%

Q: Drawing Examples ven the following information, what is e standard deviation of the returns on is…

A: In this first we have to calculate mean return and deviations from mean and from that.

Q: Stock X has a 10% expected return, a beta coefficient of 0.8, and a 25% standard deviation of…

A: Coefficient of variation tells how much the data points are dispersed around the mean. It is a…

Q: onsider the two (excess return) index model regression results for A and B:   RA = 0.8% + 1RM…

A: Here, RA = 0.8% + 1RM Therefore, Beta of Stock A is 1 R-square = 0.588 Residual standard deviation =…

Q: Demand for the Probability of This Rate of Return If Company's Products Demand Occurring This Demand…

A: A ratio that provides information regarding the return of a security to the investor in comparison…

Q: 9. Consider the two (excess return) index-model regression results for stocks A and B. The risk-free…

A: Here, Risk Free Rate is 6% Average Market is 14%…

Q: Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard deviation of…

A: Coefficient of variation =Standard deviation /Mean return x 100

Q: Q3. Find the Expected Return, Variance, and Standard Deviation for the Stock Returns 1 and 2. Also,…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: Stock A Stock B Market Standard Deviation Return Correlation Coefficient between A & M Correlation…

A: The Capital Asset Pricing Model(CAPM) refers to the relationship between expected return for assets…

Q: Use the following table of information: Stock X Stock Y Expected Return 14% 18% Standard Deviation…

A: The term "variance" is referred to as the degree of volatility that a stock have with respect to its…

Q: You are given the following probability distribution for a stock:  Probability       Outcome…

A: A) The computation of expected return: Hence, the expected return is 6%.

Q: Returns State of Economy Prob J K Recession 0.25 -0.02 0.034 Normal 0.6 0.138 0.062…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Expected return A stock's returns have the following distribution: Demand for the Company's…

A: Formulas:

Q: Quantitative Problem: You are given the following probability distribution for CHC Enterprises:…

A: Expected return from stock can be calculated by using this formula  Expected return…

Q: You are given the following probability distribution for CHC Enterprises: State of Economy…

A: Calculate the mean of the given distribution by taking the sum of multiplication of returns with…

Q: Rate of Return If State Occurs State of Probability of State of Economy Economy Stock A Stock B…

A: Expected return of the portfolio means the mean of the probability distribution of investment…

Q: Stock A has an expected return of 10% and a standard deviation of35%. Stock B has an expected return…

A: Given:   Stock A Stock B Expected Return(E(r)) 10.00% 15.00% SD[r] 35.00% 45.00% Weight of…

Q: Consider the rate of return of stocks ABC and XYZ.   Year rABC rXYZ 1 20 % 28 % 2 8   11   3 16…

A: D. EXPECTED RETURN =∑N pn×rnwhere,pn= probabilties of stockrn= return of stock given, 5 stock of…

Q: Question 1 Suppose you have the following expectations about the market condition and the returns…

A: Let i = 1, 2 & 3 represent the three states of market namely, Bear, Normal and Bull.Pi =…

Q: What is the standard deviation of the returns on a stock given the following information? State of…

A: Given data is -  State of Economy Probability of state of economy Returns Recession 0.05 6%…

Q: Quantitative Problem: You are given the following probability distribution for CHC Enterprises:…

A: The return and risk associated with the investment should be determined prior to the investment. The…

Q: What is the expected return for the following stock? (State your answer in percent with one decimal…

A: The expected return is the minimum return that we get if we take all the factors into consideration.…

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.