Expected return and standard deviation for investment

Assignment Help Business Management
Reference no: EM13115367

Kate recently invested in real estate with the intention of selling the property one year from today. She has modeled the returns on that investment based on three economic scenarios. She believes that if the economy stays healthy, then her investment will generate a 30 percent return. However, if the economy softens, as predicted, the return will be 10 percent, while the return will be -25 percent if the economy slips into a recession. If the probabilities of the healthy, soft, and recessionary states are 0.4, 0.5, and 0.1, respectively, then what are the expected return and the standard deviation for Kate's investment?

Reference no: EM13115367

Questions Cloud

Determining transaction fee of underwriting : Sherman Brothers, Inc., sold 4 million shares in its IPO, at a price of $18.50 per share. Management negotiated a fee (the underwriting spread) of 7% on this transaction.
Conversion price of a bond : You own a bond with a face value of $10,000 and a conversion ratio of 450. What is the conversion price?
Double click privacy policy case study : Prepare a 700- to 1,050-word analysis using the Double Click Privacy Policy case study, explaining at least three legal, three ethical, and three regulatory issues that need to be addressed by the organization.
Construct a confidence interval for coefficient of age : Construct a 95% confidence interval for the coefficient of AGE. Report the lower limit only correct to one decimal place.
Expected return and standard deviation for investment : If the probabilities of the healthy, soft, and recessionary states are 0.4, 0.5, and 0.1, respectively, then what are the expected return and the standard deviation for Kate's investment?
Trend of decreasing employee morale : Your director wants you to put together a short presentation outlining your thoughts on what is causing this trend of decreasing employee morale and recommendations on how to reverse this negative trend.
Explain what is the most important problem facing visa : What is the most important problem facing Visa? What recommendations would you make to Visa and in what order of priorities?
Explain the community services code of ethics : The Community Services Code of Ethics in Appendix A of Ethical Leadership in Human Services states, "Whatever your personal feelings about the justice and appropriateness of particular laws
Import substituting industrialization as well neoliberalism : New Deal regulated capitalism, totalitarian (fascist/communist) command economies, import substituting industrialization and neoLiberalism.

Reviews

Write a Review

Business Management Questions & Answers

  Professional staff in your organization

Commuication - Prepare a memo that might be sent to the professional staff in your organization

  Develop a case analysis

Developing a Case Study Instructions of approximately 1000 words." While answering the specific questions below, please develop a case analysis.

  Explain risk and return

Explain RISK AND RETURN, the analyst reports a buy recommendation for the common stock and no favorable recommendation, just based on "yield", for the Treasury bond

  On the basis of your unit reading create a swot analysis

On the basis of your unit reading create a SWOT analysis for the company (NIKE) you chose to research. Your analysis must be between one to two pages and identify the company's opportunities

  Explain how might such exchanges make your work faster

Illustrate what are these applications and explain why was such an exchange desirable? Explain how might such exchanges make your work faster, more efficient or more accurate?

  Communication - organizational culture

Explain how are organizational culture and organizational communication related to each other and can you provide examples to support your answer?

  Explain what are the pros and cons of each vendor

Explain What are the pros and cons of each vendor and What are some issues you would consider in making the decision to select a database vendor for an organization you work for?

  Describe how this will impact the organizations diversity

Describe how this will impact the organizations diversity training and what will need to change

  Important information about iso 14001

What is the purpose of this measurement and evaluation and is it required for certification?

  What should you the interviewer say or do

Let's say that you are interviewing a job candidate for a job. As you are conducting the interview, the applicant states that she has 3 kids and does not have a car.

  Elements of critical thinking

Estimate your top three elements of critical thinking that you would want to practice in the next three months?

  Support the position that online companies should not use

Support the position that online companies should not use behavioural targeting to better serve their target markets and there are serious ethical concerns associated with behavioural targeting.

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