What is the smallest expected loss over the next year

Assignment Help Financial Management
Reference no: EM131063070

A stock has an annual return of 12 percent and a standard deviation of 31 percent. What is the smallest expected loss over the next year with a probability of 5 percent? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Smallest expected loss %

Reference no: EM131063070

Questions Cloud

What is the intrinsic value of deployment specialists stock : Deployment Specialists pays a current (annual) dividend of $1 and is expected to grow at 24% for two years and then at 5% thereafter. If the required return for Deployment Specialists is 9.5%, what is the intrinsic value of Deployment Specialists sto..
Bond yield and after-tax cost of debt : A company's 7% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $723.9. The company's federal-plus-state tax rate is 35%. What is the firm's after-tax component cost of debt for purposes of calculati..
What inflation rate is expected after year one : Because of a recession, the inflation rate expected for the coming year is only 4%. However, the inflation rate in Year 2 and thereafter is expected to be constant at some level above 4%. Assume that the real risk-free rate is r* = 2% for all maturit..
The cost of capital: weighted average cost of capital : The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these compone..
What is the smallest expected loss over the next year : A stock has an annual return of 12 percent and a standard deviation of 31 percent. What is the smallest expected loss over the next year with a probability of 5 percent?
Moral hazard problem when a firm issues bonds : Consider the example of moral hazard problem when a firm issues bonds/takes loans (in lecture note 9). We have shown that if the a sufficiently large fraction of the project is financed by the firm’s internal funds. Suppose now only 10% of the projec..
What real amount must you deposit each year to achieve goal : You want to have $4 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 13 percent and the inflation rate is 4.5 percent. What real amount must you deposit each year to achieve your goal? (Do no..
Use as initial investment in fixed assets when evaluating : Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 6 years ago for $4 million in anticipation of using it as a warehouse and distribution site, but the company ..
What is your total return from this investment : You purchased 3,000 shares in the New Pacific Growth Fund on January 2, 2010, at an offering price of $63.10 per share. The front-end load for this fund is 5 percent, and the back-end load for redemptions within one year is 1 percent. what is your to..

Reviews

Write a Review

Financial Management Questions & Answers

  Find what is the project''s net present value

The initial cost of the fixed assets is $61,000. These assets will be worthless at the end of the project. An additional $4,500 of net working capital will be required throughout the life of the project.

  Project unit sales for seven-octave voice emulation implant

Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows: Year Unit Sales 1 88,000 2 101,000 3 115,000 4 110,000 5 91,000 Production of the implants will require $1,670,000 in net working capital to st..

  What is the value of your portfolio if the stock price

You buy 100 shares of stock at $50 per share and sell a single covered call on them for $1 per contract at the same time. The call has an exercise price of $55. What is the value of your portfolio if the stock price is still at $50 at expiration? At ..

  When using control chart-process is out of control

When using a control chart, what are some patterns that would indicate that the process is out of control? Additionally explain what might cause a process to be out of control. In your responses to other students, relate and identify to an example of..

  Annual return on the original purchase price

Over the past few years, Microsoft founder Bill Gates' net worth has fluctuated between $20 billion and $130 billion. Manhattan's native tribe sold Manhattan Island to Peter Minuit for $24 in 1626. Now, 387 years later in 2013, Bil Gates wants to buy..

  Risk of loss of the goods pass from the seller to the buyer

A contract between Pacific Import Company in Seattle and Atlantic Coast Retail Corporation in Baltimore does not expressly state which party bears the risk of loss but says only that Pacific Import is "to ship goods at the seller's expense." At what ..

  Infrastructure overhead of implementing strategy process

Why do many organizations choose not implement this process? Do you believe the cost and infrastructure overhead of implementing the Orion Strategy Process is worth the benefits? Why or why not? Without performing all of the steps within the Orion St..

  Manufacturing overhead in job order cost system

Which of the following is a characteristic of manufacturing overhead in a job order cost system?

  What is the weighted marginal cost of capital for walther

Walther's financial analysts have estimated the marginal, after-tax cost of debt, preferred stock, and common equity to be 9 percent, and 18 percent, respectively. What is the weighted marginal cost of capital for Walther?

  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..

  What is expected value of each quarterly dividend payment

James River Corp has preferred stock outstanding that trades at $125. If the stock yields 8%, what is the expected value of each quarterly dividend payment?

  Benchmark the performance of his small-cap stocks

A friend announces a plan to benchmark the performance of his small-cap stocks with the S&P 500. Which of the following concerns should dominate your thoughts?

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