Stock expected return and standard deviation

Assignment Help Finance Basics
Reference no: EM131725662

A stock's return has the following distribution:

Demand for Products                          Probability of Occurrence of Demand             Return if

                                                                                                                                             Demand Occurs

Weak                                                            0.1                                                                -40%

Below Average                                            0.2                                                                 -5

Average                                                        0.4                                                                  12

Above Average                                            0.2                                                                  21

Strong                                                           0.1                                                                  50

Calculate the stock's expected return and standard deviation.

Reference no: EM131725662

Questions Cloud

Compute depreciation expense : Compute depreciation expense under each of the following methods. Flint is on a calendar-year basis ending December 31
Weighted average cost of capital : If the cost of common equity for the firm is 18 percent, the cost of preferred stock is 10 percent, the before-tax cost of debt is 8 percent
Calculate the cash flow ratios for each company : Calculate the cash flow ratios for each company and then create an industry average of all four companies. Comment on how well you think your industry average.
Analyze data on carbon and particulate emissions of china : You will find and analyze data on the carbon and particulate emissions of China and India. You will then try to explain changes over time in emissions.
Stock expected return and standard deviation : Calculate the stock's expected return and standard deviation.
Write an analysis comparing the market ratios of companies : Choose an industry and find four companies in that industry. Using a financial Internet database such as www.marketwatch.com.
Prepare presentation designed to educate the ceo : Prepare presentation designed to educate the CEO on the proper role of an IT audit. It should reflect your own appraisal of the role of an IT auditor.
What is falon cost of common equity capital : Dividends last year were $1.39 and are expected to grow at an annual rate of 8.4 percent forever. What is Falon's cost of common equity capital?
Calculate key financial ratios for all years presented : Write a report to the management of Intel. Your report should include an evaluation of short-term liquidity, operating efficiency, capital structure.

Reviews

Write a Review

Finance Basics Questions & Answers

  Why do we tend to underestimate npv when we ignore option

Why do we tend to underestimate NPV when we ignore the option to abandon? What do you suggest as a cost-effective approach to capital budgeting analysis when a project contains real options.

  Create interest rate parity

The risk-free nominal rate in the U.S. is 3.8 percent while it is 4.1 percent in Canada. What one-year forward rate will create interest rate parity?

  Consider two firms a and b that are identical

Consider two firms A and B that are identical in all respects except capital structure. Firm A has $100 million in equity outstanding and $40 million in bonds outstanding. Firm B has $140 million in equity outstanding and $0 million in bonds outstand..

  Explain why the present value of a cash flow stream

Explain why the present value of a cash flow stream and the asset associated therewith fluctuate in value with the level of interest rates in the capital markets.

  What is the price of the bond

You find a zero coupon bond with a par value of $10,000 and 15 years to maturity. The yield to maturity on this bond is 5.2 percent. Assume semiannual compounding periods.

  Country analysis of mexico

Discuss Balance of Payments (Current Account surplus or deficit) , exchange rate, GDP growth, inflation, monetary policy, fiscal deficits/surpluses.

  Design strategy using swaps that enable to achieve objective

An asset management firm has a $300 million portfolio consisting of all stock.- Design a strategy using swaps that would enable it to achieve its objective.

  Principles or canons of taxation

Question One: Briefly explain the principles or canons of taxation. Question Two: Define a direct tax and explain some of its benefits Question Three: What are the demerits of Direct taxes?

  Assume that goodhealth clinic has fixed costs of 1million

assume that goodhealth clinic has fixed costs of 1million and a total cost forecast of 1.5 million at a volume of

  Which of following events is most likely to encourage firm

Other things held constant, which of the following events is most likely to encourage a firm to increase the amount of debt in its capital structure?

  What is the mirr using the discounted approach

The Taxi Co. is evaluating a project with the following cash flows: Year Cash Flow 0 -$13,400 1 6,100 2 6,800 3 6,500 4 5,400 5 -5,900 The company uses an 8 percent interest rate on all of its projects. What is the MIRR using the discounted approa..

  Explain risk vs reward related to personal financial goals

Explain risk vs. reward related to your personal financial goals. Explain how savings and investing are impacted by the time value of money.

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