# 2023 Q1Based on the following information State of Economy Probability of State of Economy Rate of Return

FIN- Correlation Related Multiple Problems 2023 Business & Finance

2023 Q1Based on the following information State of Economy Probability of State of Economy Rate of Return

 Q1Based on the following information:

 State of Economy Probability of  State of Economy Rate of Return if State Occurs Depression .12 −.103 Recession .23 .061 Normal .47 .132 Boom .18 .213

 Calculate the expected return. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

 Expected return [removed]  %

 Calculate the standard deviation. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

 Standard deviation [removed]  %

 Q2.Consider the following information:

 Rate of Return if State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .15 .37 .47 .27 Good .45 .22 .18 .11 Poor .35 − .04 − .07 − .05 Bust .05 − .18 − .22 − .08

 a. Your portfolio is invested 20 percent each in A and C, and 60 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))

 Expected return [removed] %

 b–1. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places. (e.g., 32.16161))

 Variance [removed]

 b–2. What is the standard deviation? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))

 Standard deviation [removed] %

Q3.Stock Y has a beta of 1.8 and an expected return of 18.2 percent. Stock Z has a beta of 0.8 and an expected return of 9.6 percent. If the risk-free rate is 5.2 percent and the market risk premium is 6.7 percent, the reward-to-risk ratios for stocks Y and Z are [removed] and [removed] percent, respectively. Since the SML reward-to-risk is [removed] percent

 Q4. Based on the following information:

 State of  Economy Return on Stock A Return on Stock B Bear .107 −.050 Normal .110 .153 Bull .078 .238

 Assume each state of the economy is equally likely to happen.

 Calculate the expected return of each of the following stocks. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

 Expected return Stock A [removed]% Stock B [removed]%

 Calculate the standard deviation of each of the following stocks. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

 Standard deviation Stock A [removed]% Stock B [removed]%

 What is the covariance between the returns of the two stocks? (Negative amount should be indicated by a minus sign, Do not round intermediate calculation and round your final answer to 6 decimal places. (e.g., 32.161616))

 Covariance [removed]

 What is the correlation between the returns of the two stocks? (Negative amount should be indicated by a minus sign, Do not round intermediate calculation round your final answer to 4 decimal places. (e.g., 32.1616))

 Correlation [removed]

We give our students 100% satisfaction for their assignment, which is one of the most important reasons students prefer us from other helpers. Our professional group and planners have more than ten years of rich experience. The only reason that our inception days, we have helped more than 100000 students with their assignments successfully. Our expert’s group have more than 2200 professionals of different topics, and that not all; we get more than 300 jobs every day more than 90% of the assignment get the conversion for payment.