QUESTION 1
-
An analyst estimates that a stock has the following return probabilities and returns depending on the state of the economy. Calculate the percentage expected rate of returns.
Stae of Economy Prob. Return Good 0.2 19% Normal 0.3 13 Poor ? 7
1 points
QUESTION 2
-
Use the following table of states of the economy and stock returns to calculate the percentage standard deviation for Bradley.
Security Returns
if State Occurs
Prob of State of Economy Roten Bradley Bust 0.6 -10% 24.9% Boom ? 40 6.5
2 points
QUESTION 3
-
Use the following table of states of the economy and stock returns to calculate the expected return on a portfolio of 56 percent Roten and the rest in Bradley.
Security
if State
Returns
Occurs
Prob of State of Economy Roten Bradley Bust 0.5 -12% 25% Boom ? 47 14
1 points
QUESTION 4
-
Use the following table of states of the economy and stock returns to calculate the percentage standard deviation of a portfolio of a portfolio of 12 percent Roten and the rest in Bradley.
Security
if State
Returns
Occurs
Prob of State of Economy Roten Bradley Bust 0.3 -17% 29% Boom ? 35 13
3 points
QUESTION 5
-
Use the following information to calculate the percentage expected return a portfolio that is 42.7 percent invested in 3 Doors, Inc., and the rest invested in Down Co.:
3 Dorrs, Inc. Down Co. Expected return 16% 13% Standard deviation 44 8 Correlation 2
1 points
QUESTION 6
-
Use the following information to calculate the percentage standard deviation of a portfolio that is 75.2 percent invested in 3 Doors, Inc., and the rest invested in Down Co.:
3 Dorrs, Inc. Down Co. Expected return 21% 14% Standard deviation 58 41 Correlation 0.53
