1. You are given the following probability distribution of returns for stock J:
ID: 2739730 • Letter: 1
Question
1. You are given the following probability distribution of returns for stock J: A probability of .2 that the return will be 12%; a probability of .35 that the return will be 18%; a probability of .3 that the return will be-10%; and a probability of .15 that the return will be 10%. What is the expected return of this stock? What is the standard deviation rounded to the nearest whole number? 2. Given the following hypothetical returns of large companies and T-bil between 2007 and 2012. Please calculate the average return and standard deviation of both large companies YearLarge co. stock returnT-bill return 2007-14.69% 200826.47 2009 37.23 2010 23.93 2011 -7.16 2012 6.57 7.29% 7.99 5.87 5.07 5.45 7.64 3. Troy has a 2-stock portfolio with a total value of $100.000. $37.500 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42. What is his portfolio's beta?Explanation / Answer
Probability Return Multiple of Probability and return 0.20 12% 2.4% 0.35 18% 6.3% 0.30 -10% -3.0% 0.15 10% 1.5% 7.2%
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.