Find the expected return and the standard deviation

Assignment Help Financial Accounting

Reference no: EM1312009

Calculation of variance and standard deviation.

Kate recently invested in real estate with the intention of selling the property one year from today. She has modeled the returns on the investment based on three economics scenarios. She believes that if the economy stays healty, then her investment will generate a 30 percent retuen. However, if the economy softens, as predicted, the return will be 10 percent, while the return will be - 25 percent if the economy slips into a recession. If the probabilities of the healthy, soft, and recessionary states are 0.4,0.5, and 0.1, respectively, then what are the expected return and the standard deviation of the return on Kate's investment?

Reference no: EM1312009

Questions Cloud

One-way anova and post-hoc test using spss : In this paragraph, be sure to make it clear how you handled the issue of conducting three planned comparisons. Also provide the ANOVA summary table for these results.

Variability of demand seem to have on buffer stock : Illustrate what is the annual cost for chocolate syrup buffer stocks. Illustrate what impact does the variability of demand seem to have on buffer stock.

Hypothesis test to find processes which reduced wait time : By using.02 level of significance, carry out a 5-step hypothesis testing procedure to find out if new processes considerably reduced the wait time.

Find out the magnitude of the acceleration of the boy : A spider of mass m is sitting in a perfectly symmetric web (in a vertical plane with 45 angles between the web lines), where Ti's denote the tensions along the lines that are connected to the spider at the center with i = 1, 2, 3, 4, 5, 6, 7, 8. The ..

Find the expected return and the standard deviation : Calculation of variance and standard deviation - Find the expected return and the standard deviation of the return on Kate's investment?

Worst board of directors founder steve jobs : In 2002 business week listed apple Calculator as having one of the worst board of directors: founder Steve jobs owns just 2 shares in the company.

How much work is completed by the ball : A 170, 35.0 cm-diameter turntables rotate on frictionless bearings at 53.0. A 20.0 block sits at the center of turntable. A compressed spring shoots the block completely outward along a frictionless groove in the surface of the turntable.

What was the cost of goods sold if the lifo method : Assuming the periodic inventory system is in use, what was the Cost of Goods Sold if the LIFO Method is used and Assuming the periodic inventory system is in use, what is the value of ending inventory if the LIFO Method is used?

One way anova-linear contrasts : Analyze the data using linear contrasts to make the following comparisons:

User Account

All Pages