Compute the variance and the standard deviation

Assignment Help Finance Basics

Reference no: EM13273639

Hull Consultants, a famous think tank in the Midwest, has provided probability estimates for the four potential economic states for the coming year. The probability of a boom economy is 13%, the probability of a stable growth economy is 19%, the probability of a stagnant economy is 51%, and the probability of a recession is 17%. Calculate the variance and the standard deviation of the three investments: Stock, corporate bond and goverment bond. If the estimates for both the probabilities of the economy and the returns in each state of the economy are correct, which investment would you chose? returns on the following individual investments for the coming year. Investment Forecasted Returns for Boom Economy Forecasted Returns for Stable Growth Economy Forecasted Returns for Stagnant Economy Forecasted Returns for Recession Economy Stock 23% 10% 7% -11% Corporate bond 10% 7% 5% 3% Government bond 9% 6% 4% 2%.

Reference no: EM13273639

Questions Cloud

Explain will the joint meet the loss restrictions : The transmitting fiber has a core diameter of 80µm and the receiving fiber has a core diameter of 110µm. The transmitting fiber has n1=1.46 n2=1.40 and the receiving fiber has n1=1.48 and n2=1.46. Will this joint meet the loss restrictions

Determine the time that was recorded on earth : Donovan Bailey set a world record for the 100-m dash on July 27, 1996. find the time that was recorded on Earth

Explain what is the concentration of magnesium ions : 100 microliters of a solution containing 1 mM magnesium chloride are combined with 10 microliters of a solution containing 10 mM magnesium acetate and diluted to a final volume of 1.5 mL. What is the concentration of magnesium ions in the sample

How far is the circular area from the glass window : A fiber has n1=1.53, n2=1.46 and a core diameter of .080 mm. It is to be coupled to a photodiode whose circular sensitive area is 20mm². It has been found that there is 2.75 db of coupling loss present.

Compute the variance and the standard deviation : Investment Forecasted Returns for Boom Economy Forecasted Returns for Stable Growth Economy Forecasted Returns for Stagnant Economy Forecasted Returns for Recession Economy Stock 23% 10% 7% -11% Corporate bond 10% 7% 5% 3% Government bond 9% 6% 4%..

Calculate the speed of sound in the substance : A 599 Hz sound wave travels through a substance. What is the speed of sound in the substance

Explain how many sulfur molecules reacted : Sulfur, S8, combines with oxygen at elevated temperatures to form sulfur dioxide. If 192 oxygen molecules are used up in this reaction, how many sulfur molecules reacted

What is the bulk modulus of the material : A specimen of oil having an initial volume of 600cm3 is subjected to a pressure increase of3.6×106Pa, What is the bulk modulus (in Pa) of the material

Manufacturer be liable for negligence : A flat screen television stand tips over unexpectedly and causes harm to a consumer and it has not been recalled would the manufacturer be liable for negligence?

User Account

All Pages