Compute the expected return for stock

Assignment Help Financial Management

Reference no: EM132007914

1. There is a 28.10% probability of a below average economy and a 71.90% probability of an average economy. If there is a below average economy stocks A and B will have returns of -7.40% and 18.50%, respectively. If there is an average economy stocks A and B will have returns of 11.50% and -0.80%, respectively. Compute the:

a) Expected Return for Stock A :

b) Expected Return for Stock B :

c) Standard Deviation for Stock A:

d) Standard Deviation for Stock B :

2. The market risk premium for next period is 4.70% and the risk-free rate is 1.00%. Stock Z has a beta of 0.64 and an expected return of 14.50%. What is the:

a) Market's reward-to-risk ratio?

b) Stock Z's reward-to-risk ratio?

Reference no: EM132007914

Questions Cloud

What serious biases or misassumptions do groups : What serious biases or misassumptions do groups that are involved in inter-team conflict sometimes experience? How do these biases and prejudices affect.

Design a network infrastructure for two campuses : Design a network infrastructure for two campuses located in Atlanta and Cincinnati based upon the specifications

Historical averages of the united states : Are the current unemployment and inflations rates high or low compared to the historical averages of the United States?

Create all the instances to fill up your array : Declare and initialize an array of 5 Tribbles. Create all the instances to fill up your array (passing random locations and other values to the constructor).

Compute the expected return for stock : There is a 28.10% probability of a below average economy and a 71.90% probability of an average economy. Compute the Expected Return for Stock A :

Which of these would be considered discrimination : 1. In the United States, some groups have higher incomes than others. Which of these would be considered discrimination?

Dummy variable to exclude from the model : When I was trying to improve my regression model by adding dummy variables, I noticed that there were some omitted dummy variable

What total capital investment level : A company expects to earn $16 million in income this coming year. At what total capital investment level?

Information for stock and market parameters : An analyst gathered the following information for a stock and market parameters: stock beta = 1.50; expected return on the Market = 8.10%;

User Account

All Pages