Estimating the expected return

Assignment Help Econometrics

Reference no: EM1376058

The joint probability distribution on the returns of two securities X and Y is shown in the table below.
X
Y 7 10 14
8 0.12 0.03 0.3
9 0.15 0.09 0.06
10 0.05 0.18 0.02

a. Compute the expected return for each security
b. Compute the variance and standard deviation for each security
c. Assume an investor would like to constitute a portfolio of 40 percent of X and 60 percent of Y, what will be the expected return and the risk associated to this portfolio?

Reference no: EM1376058

Questions Cloud

What reasons might there be for using multiple criterions : llustrate what reasons might there be for using a single measure also illustrates what reasons might there be for using multiple criterions.

Illustrate what are some of the possible explanations : Illustrate what are some of the possible explanations for not finding any causes. Illustrate what should the manager do.

Balance in phillips company''s investment account : The balance in Phillips Company's investment account on 31st December, 2003, was $54,000.

Illustrate what is the probability that the overall rate : Illustrate what is the probability that the overall defective rate is still at 1percent if in fact, exactly two of the five are defective in this sample.

Estimating the expected return : The joint probability distribution on the returns of two securities X and Y is demonstrate in the table below.

Standard mileage method : Jan receives no reimbursement from her employer. Jan has an AGI for year of $50,000 and no other itemized deductions.

Could the hospital really perform this many operations : Elucidate how well will the new resources would be utilised relative to the current operations. Recalling the capacity of 12 surgeons also 5 operating rooms, could the hospital really perform this many operations.

Journal entry to record the bonds issuance : Prepare the 1st January, 2011, journal entry to record the bonds' issuance and Prepare first two years of an amortization table using straight-line method.

Taylor corporation pursuant to a statutory merger : Superior Corporation attained Taylor Corporation pursuant to a statutory merger under state law. As a consequence of the merger Taylor Corporation's former shareholders received common stock

User Account

All Pages