What is the standard deviation of returns

Assignment Help Financial Management

Reference no: EM131933635

1. If the interest rate is 6%, which of these investments would you prefer?

A) A single payment of $500 in year 3. B) A payment of $40 a year for 20 years starting in one year’s time. C) A perpetuity of $30 a year starting in one year’s time. D) A payment of $342.17 today

2. The common stock of Pops Foods has produced returns of 10 percent, -6 percent, and 11 percent for the past three years, respectively. What is the standard deviation of these returns?

11.62 percent 10.41 percent 9.54 percent 8.52 percent

3. Which of the following is NOT one of the conflicts with using IRR when analyzing mutually exclusive projects and projects with unconventional cash flows?

A. IRR may yield no usuable answer or multiple answers with odd cash flows.

B. Cash flows are reinvested at the IRR instead of cost of capital.

C. A lower IRR can be better if a cash inflow is followed by cash outflows.

D. Projects with significantly different costs.

Reference no: EM131933635

Questions Cloud

Shares of the law firm according to the CAPM : what is the expected return on the shares of the law firm according to the CAPM?

Firms with similar growth and risk characteristics return : Firms with similar growth and risk characteristics return 9% per year to their equity investors. What is BBWC's intrinsic value?

Estimate of slow steady cost of equity capital : What is your estimate of Slow 'n Steady's cost of equity capital?

Explain the capital asset pricing model : Explain the Capital Asset Pricing Model. Please include your understanding on systematic/non-systematic risks, diversification, market security line, and beta.

What is the standard deviation of returns : The common stock of Pops Foods has produced returns of 10 percent, -6 percent, What is the standard deviation of these returns?

What is delta for dell profit assuming zero pass through : What is Dell's dollar profit exposure and how to hedge it using forward? What is the delta for Dell's profit assuming zero pass through?

What is the maximum price you are willing to pay for stock : you are expecting the beta to remain the same in the following three years. What is the maximum price you are willing to pay for this stock today?

Wishes to expand by acquiring other firms : B Ltd is a highly successful company and wishes to expand by acquiring other firms.

Operates unobtanium mine on the planet alberta : RDA Mines Inc. operates an unobtanium mine on the planet Alberta which is a satellite in the Alpha Centauri system near Pandora.

User Account

All Pages