25 May Question 91. Expected Return and Risk Compute the standard deviation given these four economic
Question
91. Expected Return and Risk Compute the standard deviation given these four economic states, their likelihoods, and the potential returns:
| Economic State | Probability | Return |
| Fast Growth | 0.20 | 100% |
| Slow Growth | 0.50 | 10% |
| Recession | 0.20 | ?1% |
| Depression | 0.10 | ?10% |
a. 12.19%
b. 23.8%
c. 38.65%
d. 88.06%
[QUESTION]
92. Expected Return and Risk Compute the standard deviation given these four economic states, their likelihoods, and the potential returns:
| Economic State | Probability | Return |
| Fast Growth | 0.40 | 20% |
| Slow Growth | 0.30 | 10% |
| Recession | 0.20 | 5% |
| Depression | 0.10 | 2% |
a. 5.23%
b. 6.82%
c. 12.2%
d. 14.88%
[QUESTION]
93. Expected Return and Risk Compute the standard deviation given these four economic states, their likelihoods, and the potential returns:
| Economic State | Probability | Return |
| Fast Growth | 0.35 | 40% |
| Slow Growth | 0.45 | 10% |
| Recession | 0.10 | ?10% |
| Depression | 0.10 | ?100% |
a. 7.5%
b. 12.65%
c. 39.48%
d. 113.69%
[QUESTION]
94. Expected Return and Risk Compute the standard deviation given these four economic states, their likelihoods, and the potential returns:
| Economic State | Probability | Return |
| Fast Growth | 0.40 | 20% |
| Slow Growth | 0.20 | 5% |
| Recession | 0.30 | ?5% |
| Depression | 0.10 | ?20% |
a. 5.5%
b. 7.14%
c. 13.5%
d. 31.16%
[QUESTION]
95. Risk Premiums You own $1,000 of Diner’s Corp stock that has a beta of 2.5. You also own $1,500 of Comm Corp (beta=1.4) and $1,500 of Airlines Corp (beta=0.75). Assume that the market return will be 14 percent and the risk-free rate is 6 percent. What is the total risk premium of the portfolio?
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