What is the expected return on stock a and b

Assignment Help Financial Accounting
Reference no: EM132882781

Problem 1: In the bad economy, which happens 30% of the time, Stock A goes down by 5% and B goes down by 15%. In the good economy, which happens 70% of the time, Stock A goes up by 15% and B goes up by 20%. What is the expected return on stock A and B, respectively?

Option 1: 7.5%, 18.5%

Option 2: 7.5%, 10.5%

Option 3: 16.5 %, 10.5%

Option 4: 9.0 %, 9.5%

Option 5: None of the above are within 1 percentage point.

Problem 2: Using the information in 1, suppose a portfolio consists of 60% of stock A and 40% of stock B, what is the expected return of this portfolio?

Option 1: 7.5 %

Option 2: 13.3%

Option 3: 11.9%

Option 4: 9.2%

Option 5: 15.3%

Problem 3: Again using information in 1, what is the standard deviation of only stock B?

Option 1: 3.5%

Option 2: 4.25%

Option 3: 5.8%

Option 4: more than 15%

Option 5: less than 2.3%

Reference no: EM132882781

Questions Cloud

What is the dividend growth that supports the stock price : What is the dividend growth that supports this stock price, if dividend growth is constant? The expected dividend in one year is $4.00.
What is recourse in the matter : Now in it's 7th year, L&S has grown to 8 stores and more than 175 employees. Tom & Mark have continued in their dictatorial ways, and the employees
Compute the inventory amounts at december : Compute the inventory amounts at December 31, 2019, 2020, and 2021 using the dollar-value LIFO inventory method for each year
Basic components of a public health gis application : Besides the software itself, what are the basic components of a public health GIS application?
What is the expected return on stock a and b : Which happens 70% of the time, Stock A goes up by 15% and B goes up by 20%. What is the expected return on stock A and B, respectively?
List-group-label assignment : For full credit you must incorporate into your discussion the listed thinking-points below. Please refer to specific places in the video that help you reach you
Can any firm beat amazon in the marketplace : -Can any firm beat Amazon in the marketplace? If not, why not? If so, how can they best do so? How formidable a competitor is Google for Amazon? Please explain.
Why do you feel brand experience is important : Why do you feel brand experience is important? What new areas have you learned about that would impact your marketing approach?
How much will have to pay each year : The account's balance will be 0 at the end of the sixth year. If the bank has promised Ms. Shouppe a 10% return, how much will they have to pay her each year?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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