Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Consider the following information on three stocks.

Rate of Return if State Occurs

State of economy Probability of state of economy Stock A Stock B Stock C

Boom 0.5 0.2 0.35 0.6

Normal 0.3 0.15 0.12 0.05

Bust 0.2 0.01 -0.25 -0.5

a. If your portfolio is invested 40% each in A and C, and 20% in B, what is the portfolio expected return?

b. What is the variance of this portfolio?

c. What is the standard deviation of this portfolio?

d. If the expected T-Bill rate is 5%, what is the expected risk premium on the portfolio?

e. If the expected inflation rate is 2.50%, what are the approximate and exact expected real returns on the portfolio?

f. If the expected T-Bill rate is 5% and the expected inflation rate is 2.50%, what are the approximate and exact expected real risk premiums on the portfolio?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M938201

Have any Question? 


Related Questions in Basic Finance

Individual paper - analysis of an ethical dilemmathe

Individual Paper - Analysis of an Ethical Dilemma The assignment is as follows: Each student should research and write a paper about an organization that has encountered a serious ethical dilemma in the past. Please do n ...

1 why do researchers calculate the coefficient of

1. Why do researchers calculate the coefficient of determination? 2. What does a coefficient of determination of .40 indicate?

Us federal law regulates some futures market participants

U.S. federal law regulates some futures market participants, even though they do not directly participate in trading. Explain the difference between an introducing broker, a commodity trading advisor, a commodity pool op ...

If benchmarking does not exist at any level within an

if benchmarking does not exist at any level within an organization, identify some organizational goals that could benefit from benchmarking activities, and strategies you would recommend to employ benchmarking

Jacob money inc has a profit margin of 11 and a retention

Jacob Money Inc. has a profit margin of 11% and a retention ratio of 70%. Last year, thefirm had sales of $500 and total assets of $1,000. The desired total debt ratio is 75%. What is the firm's sustainable growth rate?

A hedge fund is currently engaged in a plain vanilla euro

A hedge fund is currently engaged in a plain vanilla euro swap in which it pays euros at the euro floating rate of Euribor and receives euros fixed. It would like to convert this position into one in which it pays the re ...

Most of this class focused on the long-term outlook of the

Most of this class focused on the long-term outlook of the firm. Given the nature of corporate financing and investment decisions, that focus on long-term operations is appropriate. In periods of rapid change where long- ...

1 in what ways are experimental research designs preferable

1. In what ways are experimental research designs preferable to correlational or descriptive designs? What are the limitations of experimental designs? 2. What is the purpose of random assignment to conditions? 3. Descri ...

Barilla is an italian multinational food company which

Barilla is an Italian multinational food company which ‘has significantly believed in B2B e-commerce and, in particular, in EDI (Electronic Data Interchange), especially in terms of Web-EDI, which supports the orderdeliv ...

In each of 4 years a random sample of 100 voters different

In each of 4 years a random sample of 100 voters (different each year) are asked if they support a political party. The numbers each year who support the party are 41, 32, 35, and 33. (a) Give a 95 percent confidence int ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen