STATISTICAL TECH IN BUSN CONNECT <LCPO>
18th Edition
ISBN: 9781266505942
Author: Lind
Publisher: MCG
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Chapter 20, Problem 6E
To determine
Find the expected opportunity losses.
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A survey of 131 investment managers in Barron’s Big Money poll revealed the following:● 43% of managers classified themselves as bullish or very bullish on the stockmarket.● The average expected return over the next 12 months for equities was 11.2%.● 21% selected health care as the sector most likely to lead the market in thenext 12 months.● When asked to estimate how long it would take for technology and telecom stocksto resume sustainable growth, the managers’ average response was 2.5 years.a. Cite two descriptive statistics.b. Make an inference about the population of all investment managers concerning theaverage return expected on equities over the next 12 months.c. Make an inference about the length of time it will take for technology and telecomstocks to resume sustainable growth.
A survey of 131 investment managers in Barron’s Big Money poll revealed the following:● 43% of managers classified themselves as bullish or very bullish on the stockmarket.● The average expected return over the next 12 months for equities was 11.2%.● 21% selected health care as the sector most likely to lead the market in thenext 12 months.● When asked to estimate how long it would take for technology and telecom stocksto resume sustainable growth, the managers’ average response was 2.5 years.a. Cite two descriptive statistics.
A survey of 131 investment managers in Barron’s Big Money poll revealed the following:● 43% of managers classified themselves as bullish or very bullish on the stockmarket.● The average expected return over the next 12 months for equities was 11.2%.● 21% selected health care as the sector most likely to lead the market in thenext 12 months.● When asked to estimate how long it would take for technology and telecom stocksto resume sustainable growth, the managers’ average response was 2.5 years.a. Cite two descriptive statistics.b. Make an inference about the population of all investment managers concerning theaverage return expected on equities over the next 12 months
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STATISTICAL TECH IN BUSN CONNECT <LCPO>
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- The Capital Asset Pricing Model (CAPM) is a financial model that assumes returns on a portfolio are normally distributed. Suppose a portfolio has an average annual return of 14.7% (i.e. an average gain of 14.7%) with a standard deviation of 33%. A return of 0% means the value of the portfolio doesn’t change, a negative return means that the portfolio loses money, and a positive return means that the portfolio gains money. What percent of years does this portfolio lose money, i.e. have a return less than 0%? What is the cutoff for the highest 15% of annual returns with this portfolio?arrow_forwardTwo investments, X and Y, have the characteristics shown below. E(X) = $60, E(Y) = $90, o = 10,000, o? = 17,000 and axy = 6,500 If the weight of portfolio assets assigned to investment X is 0.8, calculate the a. portfolio expected return and b. portfolio risk. a. If the weight of portfolio assets assigned to investment X is 0.8, the portfolio expected return is $ (Type an integer or a decimal.) b. If the weight of portfolio assets assigned to investment X is 0.8, the portfolio risk is approximately $. (Round to two decimal places as needed.)arrow_forwardReturns earned over a given time period are called realized returns. Historical data on realized returns is often used to estimate future results. Analysts across companies use realized stock returns to estimate the risk of a stock. Consider the case of Celestial Crane Cosmetics Inc. (CCC): Five years of realized returns for CCC are given in the following table. Remember: 1. While CCC was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for CCC for 2014 to 2018 are: 2014 2015 2016 2017 2018 Stock return 18.75% 12.75% 22.50% 31.50% 9.75% Given the preceding data, the average realized return on CCC’s stock is . The preceding data series represents of CCC’s historical returns. Based on this conclusion, the standard deviation of CCC’s historical returns is . If investors expect the…arrow_forward
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