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QUESTION

Given the data below, calculate the expected return, variance, and standard deviation of the following company.

Given the data below, calculate the expected return, variance, and standard deviation of the following company.

In a recessionary economy, which is expected to occur with a 30% probability, the expected returns would be -5%.

In an expanding economy with an expected probability of occurrence of 20%, the expected return would be 10%.

In a normal economy expected to occur 50% of the time, the expected return would be 5%.

Economic state probability of state asset return A Recession 30% -5% Normal 50% 5% Boom 20% 10% Expected return(Er)-5*0.3+10*0.2+5*0.5=3 Variance =0.3 (-5-3) ^2 + 0.2*(10-3) ^2 + 0.5(5-3) ^2=...
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