Probability of doubling and probablity of tripling

Assignment Help Financial Management
Reference no: EM131068861

Assume that the returns from an asset are normally distributed. The average annual return for this asset over a specific period was 17.1 percent and the standard deviation of those returns in this period was 41.7 percent.

What is the approximate probability that your money will double in value in a single year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Probability of doubling =?

What about triple in value? (Do not round intermediate calculations. Enter your answer as a percent rounded to 6 decimal places.)

Probablity of tripling =?

Reference no: EM131068861

Questions Cloud

Rational expectations theory and anomaly theory : Market bubbles such as the technology bubble of the 1990s and the housing bubble of 2004-2007 are best explained by: A) Rational Expectations theory B) Anomaly theory C) the efficient market hypothesis D) behavioral finance and economics.
Find the future value of the following ordinary annuities : Find the future value of the following ordinary annuities: using the TVM CALCULATOR find a. FV of $400 each six month for five years at a simple rate of 12%, compounded semiannually. b. FV OF$200 each three months for five years at a simple rate of 1..
Paid prior to paying the common stockholders : A firm has issued cumulative preferred stock with a $100 par value and a 12 percent annual dividend. For the past two years, the board of directors has decided not to pay a dividend. The preferred stockholders must be paid prior to paying the common ..
Statements is indicative of an optimal capital structure : Which one of the following statements is indicative of an optimal capital structure? Choose one of the following answers
Probability of doubling and probablity of tripling : Assume that the returns from an asset are normally distributed. The average annual return for this asset over a specific period was 17.1 percent and the standard deviation of those returns in this period was 41.7 percent. What is the approximate prob..
What is the dollar value of inventory held by the firm : Camp Manufacturing turns over its inventory five times each year, has an average payment period of 35 days , and has an average collection period of 60 days. The firm has annual sales of $3.5 million and cost of goods sold of $2.4 million. Calculate ..
What is the after-tax cash flow from sale of the property : A property is sold for $5,100,000 with selling costs of 3% of the sales price. The mortgage balance at the time of sale is $3,600,000. The property was purchased 5 years ago for $4,820,000. Annual depreciation allowances of $153,016 have been taken. ..
Callable bond outstanding on the market : Fooling Company has a 11.8 percent callable bond outstanding on the market with 25 years to maturity, call protection for the next 10 years, and a call premium of $50. What is the yield to call (YTC) for this bond if the current price is 108 percent ..
What is the current death benefit from this policy : Alexandra Cunningham of College Park, Maryland, has a $100,000 participating cash value policy written on her life. The policy has accumulated $4700 in cash value; Alexandra has borrowed $3000 of this value. The policy also has accumulaed unpaid divi..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Size of the monthly payments he will be required to make

Joe secured a loan of $12,000 three years ago from a bank for use toward his college expenses. The bank charges interest at the rate of 4%/year compounded monthly on his loan. Now that he has graduated from college, Joe wishes to repay the loan by am..

  Calculate the best-case and worst-case

We are evaluating a project that costs $956,000, has a four-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 88,400 units per year. Suppose the projections giv..

  Her investments have an average annual return

Stacey would like to have $1 million available to her at retirement. Her investments have an average annual return of 11%. If she makes contributions of $300 per month, will she reach her goal when she retires in 30 years?

  Calculate the nominal annual cost of non free trade credit

Calculate the nominal annual cost of non free trade credit under each of the following terms. Assume payment is made either on the due date or on the discount date. Assume 365 days in year for your calculations.

  What is the present value of an ordinary annuity

What is the present value of an ordinary annuity of $3,125 each year for nine years, assuming an opportunity cost of 13 percent?

  Which investment would have a lower dollar market value

Which investment would have a lower dollar market value (price)? For each pair of alternatives, indicate your correct choice: A three-month treasury bill with a discount yield of 6%? A three-month treasury bill with a discount yield of 5%,

  Dollar-weighted return rate of return on this account

Howard gives his money manager 100,000 at the beginning of the year. in 6 months the account is worth 105,000 and Howard immediately gives the manager an additional 95,000. At the end of the year, the account is worth 220,000. What is the time-weight..

  What is the value of debt in the firm and value of equity

Consider a firm that has assets worth $1,000,000 today. It has a single zero-coupon debt issue with face value $800,000 and a time-to-maturity of five years. What is the risk-neutral probability that the firm will survive to T = 5? What is the value ..

  Calculate the realized rate of return for brooks

A company where J.B. Brooks works as the vice president of finance issued 20,000 bonds 10 years ago. the bonds had a face value of $1,000, annual coupon rate of 10 percent, and a maturity of 20 years. Calculate the realized rate of return for Brooks.

  What is the free cash flow for the current year

Bates Motors has the following information for the previous year: net income = $200; net operating profit after taxes (NOPAT) = $300; Total assets = $1,000 and total net operating capital = $800. The information for the current year is: net income =$..

  The common stock of lester lithographic is expected to earn

What is the expected rate of return on this stock?

  Take the rebate and use the financing from the bank

Kyle Parker of Fayetteville, Arkansas, has been shopping for a new car for several weeks. So far, he has negotiated a price of $27,000 on a model that carries a choice of a $2500 rebate or dealer financing at 2 percent APR. The dealer loan would requ..

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