Solved Question 1 Scenario Probability Recession Normal Chegg Question 1. scenario probability recession normal economy boom .14 .62 remaining rate of return stocks 5% 15% 25% bonds 14% 8% 4% a. calculate expected rate of return and standard deviation for each investment. b. which investment would you prefer? consider a portfolio with weights of .60 in stocks and .40 in bonds. c. A. what is the rate of return on the portfolio in each scenario? (enter your answer as a percent rounded to 1 decimal place.) recossion normal.
Solved Probability Scenario Severe Recession Mild Recession Chegg Chapter 11 question 13. scenario analysis. consider the following scenario analysis: scenario probability. stocks. bonds recession 0.20 5% 14% normal economy 0.60 15%. 8% boom .20 25% 4% b. calculate the expected rate of return and standard deviation for each investment. Answer: a. recession: rate of return = 0.60 * 5% 0.40 * 14% rate of return = 2.6% normal economy: rate of return = 0.60 * 15% 0.40 * 8% rate of return = 12.2% boom: rate of return = 0.60 * 25% 0.40 * 4% rate of return = 16.6% b. expected rate of return = 0.20 * 2.6% 0.60 * 12.2% 0.20 * 16.6% expected rate of return = 11.16%. A) portfolio rate of return (rr) in each of the following scenarios recession = 2.60% normal economy = 12.20% boom = 16.60% calculations. step 1 computation of rr in case of. You recently purchased a stock that is expected to earn 12% in a booming economy, 8% in a normal economy and lose 5% in a recessionary economy. there is a 15% probability of a boom, a 75% chance of a normal economy, and a 10% chance of a recession. what is your expected rate of return on this stock?.
Solved Consider The Following Scenario Analysis Scenario Chegg A) portfolio rate of return (rr) in each of the following scenarios recession = 2.60% normal economy = 12.20% boom = 16.60% calculations. step 1 computation of rr in case of. You recently purchased a stock that is expected to earn 12% in a booming economy, 8% in a normal economy and lose 5% in a recessionary economy. there is a 15% probability of a boom, a 75% chance of a normal economy, and a 10% chance of a recession. what is your expected rate of return on this stock?. Assume the probability of a recession increases to 4040 percent, the normal scenario probability remains at 5555 percent, and the expansion probability drops to only 55 percent. Calculate the expected return for the two stocks a and b respectively. calculate the standard deviation for the two stocks a and b respectively. portfolio. asset's standard deviation for the portfolio as mentioned in part (c) above. critically . is this answer helpful?. The formula is: e (r) = Σ [p (i) * r (i)], where p (i) is the probability of scenario i and r (i) is the return in scenario i. standard deviation: the standard deviation measures the volatility or risk of an investment. it's calculated as the square root of the variance. Because interest rates are low during recessions and high during booms. bonds provide higher returns in recessions because low interest rates lead to higher bond prices. b) expected rate of return of stocks = sum of (probability*respective rate) expected rate of return of stocks = 0.20* 7 0.60*22 0.20*33.
Solved Consider The Following Table Probability Scenario Chegg Assume the probability of a recession increases to 4040 percent, the normal scenario probability remains at 5555 percent, and the expansion probability drops to only 55 percent. Calculate the expected return for the two stocks a and b respectively. calculate the standard deviation for the two stocks a and b respectively. portfolio. asset's standard deviation for the portfolio as mentioned in part (c) above. critically . is this answer helpful?. The formula is: e (r) = Σ [p (i) * r (i)], where p (i) is the probability of scenario i and r (i) is the return in scenario i. standard deviation: the standard deviation measures the volatility or risk of an investment. it's calculated as the square root of the variance. Because interest rates are low during recessions and high during booms. bonds provide higher returns in recessions because low interest rates lead to higher bond prices. b) expected rate of return of stocks = sum of (probability*respective rate) expected rate of return of stocks = 0.20* 7 0.60*22 0.20*33.
Solved Consider The Following Scenario Analysis Scenario Chegg The formula is: e (r) = Σ [p (i) * r (i)], where p (i) is the probability of scenario i and r (i) is the return in scenario i. standard deviation: the standard deviation measures the volatility or risk of an investment. it's calculated as the square root of the variance. Because interest rates are low during recessions and high during booms. bonds provide higher returns in recessions because low interest rates lead to higher bond prices. b) expected rate of return of stocks = sum of (probability*respective rate) expected rate of return of stocks = 0.20* 7 0.60*22 0.20*33.
Solved Consider The Following Scenario Analysis Scenario Chegg
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