Calculate the expected value, Microeconomics

1) Investments

1A)

What are the two components to total return?  What does expected value measure?  What does standard deviation measure?  How can each result be used to help us purchase securities?

1B)

DATE

PRICE

DIVIDEND

Jan 2000

100.00

0.00

Jan 2001

121.55

2.25

Jan 2002

139.81

2.55

Jan 2003

138.01

2.02

Jan 2004

141.22

1.01

Jan 2005

204.23

3.09

Jan 2006

201.29

2.98

Jan 2007

169.31

1.92

Jan 2008

141.40

1.33

Jan 2009

140.55

1.25

Jan 2010

139.02

1.11

Calculate the total return:

From Jan 2000 to Jan 2010

From Jan 2000 to Jan 2003

From Jan 2003 to Jan 2004

Calculate the standard deviation of price

From Jan 2001 to Jan 2002

From Jan 2002 to Jan 2008

2)   Equities

2A)

Why is a healthy equity market important for a country?

What alternatives exist for funding if companies can't raise money in the equity markets?

2B)

Calculate the share price of a company the pays a fixed dividend of £2.30 pa when the required rate of return demanded by equity investors is 3%.  What will the price be if investors demand 12% to hold these same shares?  What will be the price if investors demand 3% to hold these same shares?

What will the share price be under all three scenarios if dividends grow by a rate of 1.5% pa?

Posted Date: 2/19/2013 12:10:53 AM | Location : United States







Related Discussions:- Calculate the expected value, Assignment Help, Ask Question on Calculate the expected value, Get Answer, Expert's Help, Calculate the expected value Discussions

Write discussion on Calculate the expected value
Your posts are moderated
Related Questions
determination of rent

Which of the following statements is correct? a. Consumers have the ability to buy everything they desire. b. A consumer''s budget line shows the limits to what a consumer can buy.

COST-OF-LIVING INDEXES   * The CPI is computed each year as the ratio of cost of a typical group of consumer goods and services today in comparison to the cost during a base per

A market is nothing more or less than the locus of exchange, it is not of necessity a place, but easily buyers and sellers coming together for transactions.   Transactions happen

Case 1: The market for drugs Supply, demand, and equilibrium: The market for drugs. Suppose the market for drugs is a perfectly competitive market. Let the supply curve

GIVE EXAMPLES OF EACH OLIGOPOLY MODELS FROM REAL LIFE


What are the economies and diseconomics of scale?

Neoclassical economics is dominant approach to economics currently taught and practiced in most of the world (and particularly dominant in Anglo-Saxon countries). It attempts to ex

illustrate and discuss implications of various market structure(non competitive and competitive) for price determination