Compute the expected return given these three economic states, their likelihoods, and the potential returns: (Round your answer to 2 decimal places.) Economic State Fast growth Slow growth Recession Probability 0.32 Return 38% 0.34 12 0.34 -31 Answer is complete but not entirely correct. Expected return 3.84%

The returns on AA Berhad and BB Berhad are given below, State of Economy Probability of Return (%) AA Return (%) BB occurring Berhad Berhad 1 0.30 6 -15 0.50 10 18 3 0.20 17 40 Calculate: a) Expected return E(R) for i) АА Beфad ii) ВВ Behad b) Standard deviation for i) AA Berhad ii) ВВ ВBehad c) Discuss any FOUR (4) benefits of diversification by referring to AA and BB Berhad.

6. Use Excel, Calculator, and Formula. Show your work. Based on the data below, estimate the following: E(r) = [Probability of Economic State x Return in Economic State 0² (r) = [[Return in State; - E(r)]³ x Probability of State; a. Estimate the expected return and risk of Asset A (TESLA) b. Estimate the Expected Return and risk of Asset B (APPLE) c. Estimate the Expected return and risk of a 60A and 40B portfolio d. Summarize your results and determine whether the Portfolio Diversification helped decrease the investment risk. Explain your answer. State of the Economy Probability of Economic State S Pr 1 N 0.6 Return In Economic State TESLA APPLE R R 0.27 -0.10 -0.15 0.35

Consider the following information about the various states of economy and the returns of various investment alternatives for each scenario. Answer the questions that follow. Work out the Covariance with mp showing detatiled working and explanation      % Return on T-Bills, Stocks and Market Index   States of Economy Probability T-Bills Phillips Pay-up Rubber-Made Market Index Recession 0.2 7 -22 28 10 -13 Below Average 0.1 7 -2 14.7 -10 1 Average 0.3 7 20 0 7 15 Above Average 0.3 7 35 -10 45 29 Boom 0.1 7 50 -20 30 43 Mean   7 16.9 20.7 19.6 15 Variance (%) ^2   0 549.09 244.124 358.04 313.6 Standard Deviation   0 23.4326695 15.6244712 18.92194493 17.7087549 Coefficient of Variation   0 1.386548491 7.54805372 0.965405354 1.18058366 Covariance wit MP             Correlation with Market Index…

Considering the following information gathered:      State of Economy Probability of State of Economy Rate of Return if State Occurs   Recession 0.11 -0.03    Normal 0.45 0.16   Boom 0.44 0.29        Please Calculate the expected return. Multiple Choice   18.65%   2.80%   19.63%   20.61%   20.42%

Compute the standard deviation of the expected return given these three economic states, their likelihoods, and the potential returns: Probability 0.1 Economic State Fast Growth Slow Growth Recession 0.6 0.3 Multiple Choice 6.8 percent 16.5 percent 21.5 percent 46.4 percent Return 50% 8% -10%

Compute the expected return given these three economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast Growth 0.2 23% Slow Growth 0.6 14% Recession 0.2 −30% Multiple Choice 12.5 percent 7.5 percent 3.5 percent 7.0 percent

Suppose that there is a constant technological progress (A) and population growth (n) in a sample economy. Production function is given as Y; = F(Kt, N¿) = A /K/N; a) What is the level of saving rate that maximizes consumption at the steady state?

Consider the following information about the various states of economy and the returns ofvarious investment alternatives for each scenario. Answer the questions that follow.% Return on T-Bills, Stocks and MarketIndexState of the Economy Probability TBills Phillips PayupRubbermadeMarketIndexRecession 0.2 7 -22 28 10 -13Below Average 0.1 7 -2 14.7 -10 1Average 0.3 7 20 0 7 15Above Average 0.3 7 35 -10 45 29Boom 0.1 7 50 -20 30 43MeanStandard DeviationCoefficient of VariationCovariance with MPCorrelation with Market IndexBetaCAPM Req. ReturnValuation(Overvalued/Undervalued/FairlyValued)Nature of stock(Aggressive/Defensive)Question 1 Fill the parts in the above table that are shaded in yellow. You will notice that there are nineline items. Question 2 Using the data generated in the previous question (Question 1);a) Plot the Security Market Line (SML) b) Superimpose the CAPM’s required return on the SML c) Indicate which investments will plot on, above and below the SML? d) If an…

Consider the following information about the various states of economy and the returns ofvarious investment alternatives for each scenario. Answer the questions that follow.% Return on T-Bills, Stocks and MarketIndexState of the Economy Probability TBills Phillips PayupRubbermadeMarketIndexRecession 0.2 7 -22 28 10 -13Below Average 0.1 7 -2 14.7 -10 1Average 0.3 7 20 0 7 15Above Average 0.3 7 35 -10 45 29Boom 0.1 7 50 -20 30 43MeanStandard DeviationCoefficient of VariationCovariance with MPCorrelation with Market IndexBetaCAPM Req. ReturnValuation(Overvalued/Undervalued/FairlyValued)Nature of stock(Aggressive/Defensive)Question 1 Fill the parts in the above table that are shaded in yellow. You will notice that there are nineline items. Each line item is worth 2 marksQuestion 2 Using the data generated in the previous question (Question 1);a) Plot the Security Market Line (SML) b) Superimpose the CAPM’s required return on the SML c) Indicate which investments will plot on, above and…