Calculate the standard deviation and expected return

Assignment Help Financial Management
Reference no: EM131308143

Calculate the expected return and standard deviation (square root of the variance) of the following probability distribution of returns 10% probability of 25% return 65% probability of 10% return 20% probability of -5% return 5% probability of -30% return What is the standard deviation?

12.65%

1.6%

11.63%

1.35%

Reference no: EM131308143

Questions Cloud

About firms capital structure strategy : In which Statement of Cash Flows section would you most likely find information about a firm’s capital structure strategy? Which of the following is an accurate description of expected return?
Afford to make monthly payments : You want to borrow $97,000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $2,050, but no more. Assuming monthly compounding, what is the highest rate you can afford on a 60-month APR loan?
Calculate the profitability index and the net present value : Calculate the Profitability Index and the Net Present Value of the following project:
Opportunity cost-stock or bond valuation : Example of TVM concept , Describe any event with the concept - be it a loan, opportunity cost, stock or bond valuation, or while subscribing for any new financial plan, or beyond.
Calculate the standard deviation and expected return : Calculate the expected return and standard deviation (square root of the variance) of the following probability distribution of returns 10% probability of 25% return 65% probability of 10% return 20% probability of -5% return 5% probability of -30% r..
Suppose to companies have the exact same balance sheets : Suppose to companies have the exact same balance sheets (i.e. – their book values are the same). Which of the following would not be a reason for one company to have a higher market value than the other?
Calculate the equivalent annual cost of each machine : Specialty Clothing Corporation is considering the purchase of two machines for their ongoing operations. When a machine is worn out, it will be replaced with another machine, since it is integral to the operations of the business. The discount rate i..
What is the after tax salvage value of the old table : Marla’s Massages and More bought a special massage table two years ago for $9,300. At the time, the accountants told Marla to depreciate the table using straight-line depreciation over three years. What is the after tax salvage value of the old table..
Excluding interest earned on the original deposit : Interest-on-Interest Consider a $2,900 deposit earning 11 percent interest per year for 8 years. How much total interest is earned on interest (excluding interest earned on the original deposit)?

Reviews

Write a Review

Financial Management Questions & Answers

  Break even analysis-sales and promotional budget

Calculate the financial information of a new product launch including forecasting demand, break even analysis, sales, promotional budget, and marketing expenses for three years by quarter for a new product launch.

  Influence firms decision to use payback

A firm has a $100 million capital budget. It is considering two project, each costing $100 million. Project A has an IRR of 20%; has an NPV of $9 million; and will be terminated after 1 year at a profit of $20 million, resulting in an immediate incre..

  Estimate your insurance needs using the DINK method

You and your spouse are in good health and have reasonably secure careers. Each of you makes about $40,000 annually. You own a home with an $80,000 mortgage, and you owe $15,000 on car loans, $5,000 on personal debts, and $4,000 on credit card loans...

  What is the yield to maturity for three-year coupon bond

Suppose you observe a 1-year zero-coupon Treasury security trading at a yield to maturity of 5%. You also have a 2-year T-note with a 6% coupon trading at a yield to maturity of 5.5%. And, finally, you observe a risk-free 3-year annuity with an annui..

  What is the true initial cost figure the company

Caughlin Company needs to raise $45 million to start a new project and will raise the money by selling new bonds. The company will generate no internal equity for the foreseeable future. What is the true initial cost figure the company should use whe..

  What was net income for the most recent four quarters

You have found the following stock quote for RJW Enterprises, Inc., in the financial pages of today’s newspaper. 52-WEEK YLD VOL NET HI LO STOCK (DIV) % PE 100s CLOSE CHG 143.85 88.53 RJW 2.80 2.0 15 18,282 ?? − .79 What was the closing price for thi..

  What is the equipments after-tax net salvage value

Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $15 million, of which 80% has been depreciated. The used equipment can be sold today for $3.75 million, and its tax rate is 30%. What is the equipment..

  Instead of increasing its long-term debt

Instead of increasing its long-term debt by borrowing money from a bank to purchase new stereo equipment, Jay's Jams Inc. decides to lease the equipment on a long-term basis. How will the long-term debt ratio differ if the lease option is selected ov..

  Taste good chocolates develops a new candy bar

Taste Good Chocolates develops a new candy bar and plans to sell each bar for $1. Taste Good predicts that 1 million candy bars will be sold in the first year if the new candy bar is produced and sold, and includes $1 million of incremental revenues ..

  Evaluating an extra dividend versus share repurchase

Flashback Corporation is evaluating an extra dividend versus a share repurchase. In either case, $35,510 would be spent. Current earnings are $3.30 per share, and the stock currently sells for $78 per share. There are 5,300 shares outstanding.

  Use the time value of money concept

Mercy Hospital is considering shifting its payroll period from twice a month to monthly. Total payroll for the year is $80 million. Billings can earn 6% on its invested money. How much would the Mercy Hospital save from such a change? (Hint: Use the ..

  Calculate the equity each of these people

Calculate the equity each of these people has in his or her home: Fred just bought a house for $200,000 by putting 10% as a down payment and borrowing the rest from the bank. Freda bought a house for $150,000 in cash, but if she were to sell it now, ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd