Question

Answered step-by-step

Asked by BailiffBookCrocodile7997 on coursehero.com

1.Your investment has a 30% chance of earning a 1% rate of return, a 40% chance of earning a 11% rate of return and a 30% chance of earning -5%. What is the standard deviation on this investment? (Put your answers in decimal points instead of percentage)

2.A portfolio with a 15% standard deviation generated a return of 5% last year when risk free T-bills were paying 1%. You are considering adding one more stock to your portfolio, the stock will boost the portfolio's expected return to 15% while also increases the standard deviation to 30%. If you are interested in the best risk versus return trade-off, should you add the stock?

A.Yes because it increases the portfolio's Sharpe ratio to 0.50

B.No because it increases the risk of the portfolio

C.No because it decreases the portfolio's sharpe ratio to 0.267

D.Yes because it increases portfolio's Sharpe ratio to 0.467

E.Yes because it increases portfolio's return to 15%.

3. You calculated that the average return of your portfolio is 8% and the standard deviation is 24%, what is the value at risk (VaR) at 5% for your portfolio?

4.You have been following a stock for 3 months and the following is its past return

Year 1: 7%

Year 2: 13%

Year 3: -3%

What is the standard deviation of the stock based on the historical data? (Put the answer in decimal points instead of percentage)

5.The returns of a mutual fund manager for the past 3 years are the following:

Year 1: 7%

Year 2: 12%

Year 3: -2%

What is the geometric average return of the fund for the past three years? Put return in decimal points instead of percentage.

6.You have been following a stock for 4 months and the following is its past return

Year 1: 2%

Year 2: 11%

Year 3: 11%

Year 4: -1%

What is the expected return based on historical data? (Put answer in decimal points instead of percentage)

Solved by verified expert

Answered by AgentHedgehog3515 on coursehero.com

sectetur a

sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. P

sectetur a

sectetur adi

sectetur adi

sectetur a

sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultricesUnlock access to this and **over 10,000 step-by-step explanations**

Have an account? Log In

<p>sectetur a</p><p>sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. P</p><p>sectetur a</p><p>sectetur adi</p><p>sectetur adi</p><p>sectetur a</p>sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices

sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus ef

sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque da

sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur

sectetur adipiscing elit. Nam

sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellen

sectetur adipiscing elit. Nam lacinia p

sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque

sectetur adipiscing elit. Nam lacinia pul

sectetur adipiscing elit. Nam lacinia pul

sectetur adipiscing elit. Nam laci

sectetur adipiscing elit.

sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facili

sectetur adipiscing elit. Nam lacini

sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellente

sectetur adipiscing elit. Nam

sectetur adipiscing elit. Nam lacinia pulvinar tortor nec fa

sectetur adipiscing elit. Nam lacinia pu

sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facili

sectetur adipiscing elit. N

sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilis

sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisi

**sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis.**

**sectetur adip**

Unlock every step-by-step explanation, download literature note PDFs, plus more.Get Access