Finance homework question
Question # 00050220
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Updated on: 02/23/2015 08:59 AM Due on: 02/23/2015

The countries of Stabilato and Variato have the following average returns and standard deviations for their stock, bond, and short-term government securities. What range of returns should you expect to earn 95% of the time for each asset class if you invested in Stabilato's securities? From investing in Variato's securities?
Stabilato stocks: Average return 8%, standard deviation 3%. Stabilato bonds: Average return 5% standard deviation 2%. Stabilato short term government debt: Average return 3% Standard deviation 1%. Variato stocks: Average return 15% standard deviation 13% Variato bonds: Average return 10% standard deviation 8%. Variato short term government debt: Average return 6% standard deviation 3%.
Stabilato stocks: Average return 8%, standard deviation 3%. Stabilato bonds: Average return 5% standard deviation 2%. Stabilato short term government debt: Average return 3% Standard deviation 1%. Variato stocks: Average return 15% standard deviation 13% Variato bonds: Average return 10% standard deviation 8%. Variato short term government debt: Average return 6% standard deviation 3%.

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Solution: Finance homework question