Solution-Calculate the ex-ante expected return

Calculate the ex-ante expected return

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Reference no: EM133067910

Use the following facts for this question and the three that follow.

You are given the following forecasts for the economy and the Agile Company at the beginning of the year:

State of the Economy	Probability of Occurrence	Expected Return
Expansion	20%	20%
Normal	60%	12%
Recession	20%	-10%

During the year, you observed the following:

Quarter	Opening Price	Dividend	Closing Price
January - March	$14.72	$0.50	$15.32
April - June	$15.32	$0.50	$16.50
July - September	$16.50	$0.50	$16.18
October - December	$16.18	$0.50	$16.76

Part A:

Calculate the ex-ante expected return to the nearest tenth of a percent

Part B:

Calculate the ex-ante standard deviation of returns to the nearest a hundredth of a percentage

Part C:

Calculate the ex-post average return to the nearest hundredth of a percentage

Part D:

Calculate the ex-post standard deviation of returns to 4 decimal points

Reference no: EM133067910

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Calculate the ex-ante expected return

Reference no: EM133067910

Reference no: EM133067910

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