DSC2604 ASSIGNMENT 3 SEMESTER 2 2020 SOLUTIONS

DSC 2604

ASSIGNMENT 3



QUESTION 1



HAR GFI AGL
a) EXPECTED RETURNS ON 0,18% 0,19% 0,10%
b) STANDARD DEVIATION 2,39% 2,26% 1,48%
c) VARIANCE 0,06% 0,05% 0,02%

d) COEFFICIENTOfVARIATION 13,26343447 11,67647709 14,71635044




QUESTION 2



a) The probability of the returns of HAR being negative = (1-0.5865) = 0.4135




The probability of the returns on GFI being negative = (1-0.6125) = 0.3875

, The probability of the returns of AGL being negative = (1-0.8136) = 0.1864




b)In the scenarios above, we can deduce that the probability distribution of the financial measure is
normally distributed and we can estimate the likelihood of different scenarios(the probability of
getting negative returns) which can be very useful for answering questions of decision makers.



QUESTION 3

a) y=21 043.47 + 64.56x