FIN2601 Assignment 2
Semester 1 &
2 2021
, FIN2601
ASSIGNMENT 2 SEMESTER 1 & 2 2021
UNIQUE NUMBER:829061/670009
PREVIEW OF QUESTION 1
1. 2 𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑟𝑒𝑡𝑢𝑟𝑛 = ∑(𝑝𝑟𝑜𝑏𝑎𝑏𝑖𝑙𝑡𝑦 ∗ 𝑟𝑒𝑡𝑢𝑟𝑛)
𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑟𝑒𝑡𝑢𝑟𝑛(𝑈𝑟𝑏𝑎𝑛 𝐹𝑜𝑜𝑑𝑖𝑒) = 0.20 ∗ −15% + 0.50 ∗ 20% + 0.30 ∗ 60% = 0.25
𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑟𝑒𝑡𝑢𝑟𝑛(𝑊𝑖𝑐𝑘𝑒𝑑 𝐶ℎ𝑒𝑓) = 0.20 ∗ 20% + 0.50 ∗ 30% + 0.30 ∗ 40% = 0.31
𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑟𝑒𝑡𝑢𝑟𝑛 𝑜𝑓 𝑎 𝑝𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 = 0.75 ∗ 0.25 + 0.25 ∗ 0.31 = 0.265 = 26.50%
Semester 1 &
2 2021
, FIN2601
ASSIGNMENT 2 SEMESTER 1 & 2 2021
UNIQUE NUMBER:829061/670009
PREVIEW OF QUESTION 1
1. 2 𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑟𝑒𝑡𝑢𝑟𝑛 = ∑(𝑝𝑟𝑜𝑏𝑎𝑏𝑖𝑙𝑡𝑦 ∗ 𝑟𝑒𝑡𝑢𝑟𝑛)
𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑟𝑒𝑡𝑢𝑟𝑛(𝑈𝑟𝑏𝑎𝑛 𝐹𝑜𝑜𝑑𝑖𝑒) = 0.20 ∗ −15% + 0.50 ∗ 20% + 0.30 ∗ 60% = 0.25
𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑟𝑒𝑡𝑢𝑟𝑛(𝑊𝑖𝑐𝑘𝑒𝑑 𝐶ℎ𝑒𝑓) = 0.20 ∗ 20% + 0.50 ∗ 30% + 0.30 ∗ 40% = 0.31
𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑟𝑒𝑡𝑢𝑟𝑛 𝑜𝑓 𝑎 𝑝𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 = 0.75 ∗ 0.25 + 0.25 ∗ 0.31 = 0.265 = 26.50%