FIN 3101 Lecture Notes - Squared Deviations From The Mean, Standard Deviation, Capital Asset Pricing Model

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aquamarinehorse310

5 Dec 2018

School

Temple University

Department

Finance

Course

FIN 3101

Professor

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Document Summary

You purchased a share of stock for . 40 seven years ago and just sold it today: you bought a stock for . 54 and sold it 5 months later for . 95 with no for . 37. No dividends were paid out over the seven years but you did receive an dividends paid. What is your (a) dollar gain or loss; (b) hpr; (c) simple annual accumulated dividend of . 80 when you sold the stock. What is your (a) dollar return; and (d) compound annual return? gain or loss; (b) hpr; (c) simple annual return; and (d) compound annual return: consider the following sample returns: 6%; -2%; 8%; 2%. 93%; and (c) above 12. 36%: based on the prior question, what is the expected return on the market, you are considering investing in one of two well-diversified portfolios.

Related Questions

1. Security A has an expected return of 8%t and a standard deviation of 20%. Security B has an expected return of 10% and a standard deviation of 50%.

a) If you place half of your money in each stock, what is your expected return?

b) If you place 30% of your money in A and the remaining 70% in B, what is your expected return?

c) If the correlation between the returns of Securities A and B above is-0.5, what are the
variance and the standard deviation of the returns of each of the two portfolios
you found in parts a) and 1 b) above?

cyanhound792

Which of the following statements regarding dollar returns and percentage returns is incorrect?

A. If you purchased a 6% bond at par ($1,000) and one year later sold it for $1,050 after receiving the coupons, your dollar return is $80.

B. Your percentage return in A) is 11%.

C. If you purchased a stock for $50 and one year later sold it for $55 after receiving $5 of dividends, your dollar return is $10.

D. Your percentage return in C) is 20%.

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Question 5 of 25

1.0 Points

Calculate the expected return for the following stock?

State (i) Probability (pi) Return (Ri)

------------------------------------------------------

Normal .60 .25

Recession .30 .05

Depression ?? â.35

A. 8%

B. 9%

C. 11%

D. 13%

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Question 6 of 25

1.0 Points

Calculate the variance of the stock in Question 5 above.

A. .0285

B. .0336

C. .0457

D. .0491

byzantiumprairie-dog702

1. Stocks A and B has the following returns over 4 quarters:

	Stock A	Stock B
1	0.07	0.04
2	0.08	0.06
3	0.06	-0.01
4	-0.01	-0.01

a. What is the expected returns of these stocks in the next quarter?

b. What is standard deviation of these stocks?

c. If their correlation is 0.45, and you invest $30,000 in stock A and $70,000 in stock B, what is the expected return and standard deviation of your portfolio?

d. What is realized return of each stock over 4 quarters?

bronzeelk610

FIN 3101 Lecture Notes - Squared Deviations From The Mean, Standard Deviation, Capital Asset Pricing Model

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