Professional Documents
Culture Documents
Economy,whic Prob.of this Rate of return if Economy,whic Prob.of this Rate of return if
h effect demand this demand h effect demand this demand
demand occuring occurs demand occuring occurs
Martin Product
Economy,whic Prob.of this Rate of return Economy,whic
h effect demand if this demand h effect
demand occuring occurs demand
(1) (2) (3) (1)
Strong 0.3 80% Strong
Normal 0.4 10% Normal
Weak 0.3 -60% Weak
U.S. Water
Prob.of this Rate of return
demand if this demand
occuring occurs
(2) (3)
0.3 15%
0.4 10%
0.3 5%
Find the standard deviation
Martin Product
Year Rate of return
(1) (2)
2018 30%
2019 -10%
2020 -19%
2021 40%
Find the Coefficient of Variation and Sharpe Ratio.
(Return-Risk Free
Sharpe ratio Rate)/SD
0.11
U.S. Water
deviation/Expected Return
Find the Risk Premium.
PR = 5%
Find the Portfolio Return.
Stock Expected Return Dollars Invest Percent of Total (Wi) Expected Return
rM = Market return
rH = Stock H's return
rA = Stock A's return
rL = Stock L's return
Beta H
Beta A
Beta L