Calculate the co-variance between the returns of stock

Assignment Help Financial Management
Reference no: EM131464137

Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 0.12 and 0.19, respectively. (Round your answer to 4 decimal places. For example .1244)

Reference no: EM131464137

Questions Cloud

Descending order of associated risk premium : Rank the three bracelets in descending order of associated risk premium for Tabatha.
What is the present worth of the alternative : Calculate Present Worth from Project Summary with Uniform Gradient Series. What is the Present Worth of the Alternative?
Considering the purchase of new manufacturing facility : Sanders Enterprises, Inc., has been considering the purchase of new manufacturing facility for $276,000. Calculate the NPV of the project.
What is the effective cost of mortgage : What is the effective cost of mortgage? What is the monthly payment?
Calculate the co-variance between the returns of stock : Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B.
What should the current price of the firms stock : What should the current price of the firm's stock be today if investors require a rate of return of 12% on the stock?
The stock has an expected return : Mike bought a stock and he found that the stock has an expected return of 19.5% with a standard deviation of 7%.
Asset management ratios : Asset Management Ratios Corn Products, Corp. ended the year 2008 with an average collection period of 35 days.
Find the ROI foe the five year venture : Find the ROI for the following 5-year venture. Interest is compounded quarterly. Draw the net worth diagram that shows the net worth at each year.

Reviews

Write a Review

Financial Management Questions & Answers

  Describes the need for a marketing audit

Describes the need for a marketing audit and describes structured approaches for conducting market audits such as the SWOT analysis.

  Makes it financially critical to maintain credit score

Mortgage lenders base the mortgage interest rate they offer you on your credit rating. This makes it financially critical to maintain a credit score of 700 or higher. How much more interest would you pay on a $184,000 home if you put 20% down and fin..

  Weighted-average cost of capital

Dusit is financed 25% by debt yielding 8.4%. Investors require a return of 15.4% on Dusit’s equity. What is the company’s weighted-average cost of capital if the corporate tax rate is 35%? What would be the company’s cost of capital if it were exempt..

  What is the expected dividend per share for each

Warr Corporation just paid a dividend of $3.5 a share (that is, D0 = $3.5). The dividend is expected to grow 7% a year for the next 3 years and then at 5% a year thereafter. What is the expected dividend per share for each of the next 5 years?

  Calculate the net present value and benefit cost ratio

The parks department is considering building a new pool. If the project is approved, the pool will be constructed in 2016 for a total cost of $400,000 to be paid from the cash reserves of the department. calculate the Net Present Value (NPV) and Bene..

  Assume the current treasury yield curve shows

Assume the current Treasury yield curve shows that the spot rates six months, one year, and one and a half years are 1%, 1.1% and 1.3%, all quoted as semi annually compounded APRs. What is the price of a $1,000 par, 4.25% coupon bond maturing in one ..

  What is the value of the bid-ask spread on this bond

A $100,000 Treasury bond has a bid price quote of 115.20 and an asked quote of 115.23. In dollars, what is the value of the bid-ask spread on this bond?

  Calculate operating cash flow using four approaches

A proposed new project has projected sales of $118,000, costs of $52,000, and depreciation of $12,100. The tax rate is 34 percent. Calculate operating cash flow using the four different approaches. (Do not round intermediate calculations.) Approaches..

  Estimate your exposure to the exchange risk

Suppose you are a British venture capitalist holding a major stake in an e-commerce start-up in Silicon Valley. As a British resident, you are concerned with the pound value of your U.S. equity position. You assess that a boom and a recession are equ..

  Shares outstanding and debt with interest payments

MassNet Corporation has 5.50 million shares outstanding and debt with interest payments of $1.27 million. What earnings before interest and tax (EBIT) must the firm have if it were to provide $3per share to the shareholders? Assume perfect markets.

  Open savings account

A friend asks whether he should open a savings account that pays 5 percent interest compounded semiannually or one that pays 5 percent interest compounded daily. What would you tell him or her, and why?

  1 identify the key criteria and considerations that need to

1. identify the key criteria and considerations that need to be taken into account in evaluating bfsi entry in the

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