wsparon mureFinancial analysts have estimated the retums on shares of the Woods Corporation and the overall market portfolo under two economic states nature as follows For Woods the state dependent returns are -0.02 in recession, and0.05 in an economic boom. For the market the state dependent retums are -0.06 in recession, and 0.12 in boom. The analyst estimates that the probability of a recession is 0.50 while the probability of an economic boom le 0.50Compute the covenance between Woods and the market*State your answer in decimal form, working your analysis using at least five decimal places of accuracyCHECK ANSWER

When two stocks are to be determined in relationship with each other then covariance is found. In…

Financial analysts have estimated the retums on shares of the Woods Corporation and the overall market portfolo under two economic states nature as follows For Woods the state dependent retums are -0.02 in recession, and 0.001 economic boom. For the market the state dependent retums are 0.08 in recession, and 0.12 in boom. The analyst estimates that the probability of a recession is 0.50 while the probability of an economic boom is 0.50 Compute the covenance between Woods and the market State your answer in decimal form, working your analysis using at least five decimal places of accuracy CHECK ANSWER

Financial analysts have estimated the retums on shares of the Woods Corporation and the overall market portfolo under two economic states nature as follows For Woods the state dependent retums are -0.02 in recession, and 0.001 economic boom. For the market the state dependent retums are 0.08 in recession, and 0.12 in boom. The analyst estimates that the probability of a recession is 0.50 while the probability of an economic boom is 0.50 Compute the covenance between Woods and the market State your answer in decimal form, working your analysis using at least five decimal places of accuracy CHECK ANSWER

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 4P: Investment advisors estimated the stock market returns for four market segments: computers,...

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Financial analysts have estimated the returns on shares of the Goldday Corporation and the overall market portfolio under two economic states nature as follows. For Goldday the state dependent returns are -0.06 in recession, and 0.08 in an economic boom. For the market the state dependent returns are -0.06 in recession, and 0.14 in boom. The analyst estimates that the probability of a recession is 0.50 while the probability of an economic boom is 0.50. Compute the beta of Goldday. * State your answer in decimal form, working your analysis using at least four decimal places of accuracy.
Financial analysts have estimated the returns on shares of the Goldday Corporation and the overall market portfolio under two economic states nature as follows. For Goldday the state dependent returns are -0.04 in recession, and 0.10 in an economic boom. For the market the state dependent returns are -0.12 in recession,and 0.14 in boom. The analyst estimates that the probability of a recession is 0.50 while the probability of an economic boom is 0.50.Compute the standard deviation of the market.
Financial analysts have estimated the returns on shares of the Goldday Corporation and the overall market portfolio under two economic states nature as follows. For Goldday the state dependent returns are -0.06 in recession, and 0.10 in an economic boom. For the market the state dependent returns are -0.08 in recession,and 0.18 in boom. The analyst estimates that the probability of a recession is 0.50 while the probability of an economic boom is 0.50. Compute the standard deviation of the market._____________ * State your answer in decimal form, working your analysis using at least four decimal places of accuracy.
Financial analysts have estimated the returns on shares of the Goldday Corporation and the overall market portfolio under two economic states nature as follows. For Goldday the state dependent returns are -0.06 in recession, and 0.08 in an economic boom. For the market the state dependent returns are -0.12 in recession, and 0.16 in boom. The analyst estimates that the probability of a recession is 0.50 while the probability of an economic boom is 0.50. Compute the covariance between Goldday and the market. * State your answer in decimal form, working your analysis using at least four decimal places of accuracy.
Answer(s): (Your response(s) are in the boxes.) Financial analysts have estimated the returns on shares of the Goldday Corporation and the overall market portfolio under two economic states nature as follows. For Goldday the state dependent returns are -0.06 in recession, and 0.10 in an economic boom. For the market the state dependent returns are -0.08 in recession, and 0.18 in boom. The analyst estimates that the probability of a recession is 0.50 while the probability of an economic boom is 0.50. Compute the covariance between Goldday and the market. .7111 *State your answer in decimal form, working your analysis using at least four decimal places of accuracy. RESUBMIT ANSWER
You may attempt this question 3 more times for credit. Financial analysts have estimated the returns on shares of the Woods Corporation and the overall market portfolio under two economic states nature as follows. For Woods the state dependent returns are -0.03 in recession, and 0.08 in an economic boom. For the market the state dependent returns are -0.04 in recession, and 0.08 in boom. The analyst estimates that the probability of a recession is 0.50 while the probability of an economic boom is 0.50. Calculate the beta of Woods. * State your answer in decimal form, working your analysis using at least four decimal places of accuracy. CHECK ANSWER
The return on the Rush Corporation in the state of recession is estimated to be -23% and the return on Rush in the state of boom is estimated to be 32%. The return on the Oberman Corporation in the state of recession is estimated to be 45% and the return on Oberman in the state of boom is estimated to be -16%. Given this information, what is the covariance between Rush and Oberman if there is a 0.70 probability that the economy will be in the state of boom and a 0.30 probability that the economy will be in the state of recession. Place your answer in decimal form and not as a percentage
The return on the Agnes Corporation in the state of recession is estimated to be -20% and the return on Agnes in the state of boom is estimated to be 33%. The return on the Cameron Corporation in the state of recession is estimated to be 43% and the return on Cameron in the state of boom is estimated to be -20%. Given this information, what is the covariance between Agnes and Cameron if there is a 0.40 probability that the economy will be in the state of boom and a 0.60 probability that the economy will be in the state of recession. O 0.4356 -0.0868 O 0.0950 O 0.1060 -0.0801
Investment advisors estimated the stock market returns for four market segments: computers, financial, manufacturing, and pharmaceuticals. Annual return projections vary depending on whether the general economic conditions are improving, stable, or declining. The anticipated annual return percentages for each market segment under each economic condition are as follows: Assume that an individual investor wants to select one market segment for a new investment. A forecast shows improving to declining economic conditions with the following probabilities: improving (0.2), stable (0.5), and declining (0.3). What is the preferred market segment for the investor, and what is the expected return percentage? At a later date, a revised forecast shows a potential for an improvement in economic conditions. New probabilities are as follows: improving (0.4), stable (0.4), and declining (0.2). What is the preferred market segment for the investor based on these new probabilities? What is the expected return percentage?
Use the extended DuPont equation to provide a breakdown of Computrons projected return on equity. How does the projection compare with the previous years and with the industrys DuPont equation?
DAS Co. is preparing its financial forecast for next year and its AFN is negative. This means that Select one: O a. the predicted change in total assets must be negative. O b. sales growth must be negative. O c. the dividend payout ratio must be greater than the predicted growth rate in sales. O d. the predicted change in spontaneous liabilities must be greater than the predicted change in total assets.
The following table lists possible rates of return on Company A and B. State of the Economy Probability Company A Deep recession 0.05 -20% Mild recession Average Mild boom Strong boom ii. 0.25 0.35 0.20 0.15 iii. 0 10 15 30 (a) Based on the above data calculate by using the appropriate formulae the standard deviations of returns for Company A and B i. the covariance of returns between Company A and B Company B -40% the correlation between Company A and B 10 0 25 30 (b) If you wish to diversify risk would it be advisable to form a portfolio of both securities A and B? State your reasons. (No computations are required to answer this part of the question.) (c) Find the minimum variance one can get by forming a portfolio of A and B. Short- selling either stock is allowed - i.e., weights need not be all positive.