Compute expected return and standard deviation

Assignment Help Financial Management
Reference no: EM131346327

Following are four economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast growth 0.13 53 % Slow growth 0.64 14 Recession 0.18 –27 Depression 0.05 –60 Compute the expected return and standard deviation. (Do not round intermediate calculations and round your answers to 2 decimal places.) Expected return % Standard deviation

Reference no: EM131346327

Questions Cloud

What is net present value of project : A project has an initial outlay of $1,972. It has a single payoff at the end of year 3 of $7505. What is the net present value (NPV) of the project if the company's cost of capital is 9.39 percent?
Compute her net pay for the eight days work paid : Following are some transactions and events of Business Solutions. Feb. 26 The company paid cash to Lyn Addie for eight days' work at $130 per day. Mar. 25 The company sold merchandise with a $2,132 cost for $2,930 on credit to Wildcat Services, invoi..
Based on the corporate valuation model : Based on the corporate valuation model, Morgan inc's total corporate value is $475 million. The balance sheet shows $90 million of notes payable, $30 million of long-term debt, $40 million of preferred stock, and $100 million of common equity. The co..
Assume that the required reserve ratio : Assume that the required reserve ratio=8%. Customers of ABC bank have, in aggregate, deposited $6 million in their checking and saving accounts on day 1. What is the most that ABC bank can lend out to other customers on day 1 and still meet reserve r..
Compute expected return and standard deviation : Following are four economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast growth 0.13 53 % Slow growth 0.64 14 Recession 0.18 –27 Depression 0.05 –60 Compute the expected return and standard deviation.
What is nanometrics required return : Nanometrics, Inc., has a beta of 2.36. If the market return is expected to be 13.55 percent and the risk-free rate is 7.30 percent, what is Nanometrics’ required return?
The expected return on natter corporations stock : The expected return on natter corporations stock is 14%. The stocks dividend is expected to grow at a constant rate of 8% and it currently sells for $50 a share. Which of the following statements is true
Determine the net cash flows for the first year of project : Out of Eden, Inc., is planning to invest in new manufacturing equipment to make a new garden tool. The new garden tool is expected to generate additional annual sales of 8,500 units at $44 each. The new manufacturing equipment will cost $156,500 and ..
The issue of risk and the manipulation of revenues : what are vitiating factors? to what extent can vitiating factors affect the validity of an otherwise valid and enforceable contract. Expound on the issue of risk and the manipulation of revenues and expenses which apply to ROE.

Reviews

Write a Review

Financial Management Questions & Answers

  Accounting is often described as the language of business

Accounting is often described as "The Language of Business." Do you speak the language? Specify what you believe are the three most important financial ratios that might help you assess the strength of a firm. These ratios are listed towards the end ..

  Evaluating lump sums and annuities

Crissie just won the lottery, and she must choose between three award options. She can elect to receive a lump sum today of $60 million, to receive 10 end-of-year payments of $9.3 million, or 30 end-of-year payments of $5.3 million. If she expects to..

  What are the similarities and differences between the goal

Specifically, what are the similarities and differences between these goals? Provide an example of how maximizing profits might not lead to shareholder wealth maximization.

  Expected return standard deviation stock fund

A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 5.0%. Expected Return Standard Deviat..

  What is value of their stock when required rate of return

Value a Constant Growth Stock Financial analysts forecast Best Buy Company (BBY) growth for the future to be 15.00 percent. Their recent dividend was $1.29. What is the value of their stock when the required rate of return is 16.13 percent?

  Considering the purchase of a residential rental property

An investor is considering the purchase of a residential rental property that has an asking price of $400,000. The property has four rental units that are expected to rent for $1,200 each per month. How much cash income will the investor receive each..

  Explain the meaning of this calculated beta

Calculate the beta of stock using CAPM, if the appropriate require rate of return for w stock is 15%, the risk- free rate is 5%, and the expected rate of return for the market is 10%. Also explain the meaning of this calculated beta.

  Explain why the efficient markets hypothesis implies

A stock has a beta equal to 1.0. Is the standard deviation of the stock equal to the standard deviation of the market? Explain your answer.

  Determine the current value of your total investment

Determine the current value of your total investment. Do not make any changes to your investment at this time. Calculate your total based on the number of shares and the new price per share, for each company.

  Calculate the amount of the firms after tax cash flow

Moby Dick Corporation has sales of $4,635,480 income tax of $400,651; the selling general and administrative expenses of $294,228; depreciation of $395,852; cost of goods of $2,543,550; and interest expense of $188,723. Calculate the amount of the fi..

  New experimental laser treatment for heart patients

Researchers associated with South Miami Hospital (SMH) developed a new experimental laser treatment for heart patients. Its development team and the physicians who use the laser consider it to be a lifesaving advance. Is it ethical for the patient to..

  Investors caring only about the time value of money

Consider the choice between $25,000 today or $1,000 per year for 30 years, with investors caring only about the time value of money. Which of the following is true?

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