What is the standard deviation of this stock return

Assignment Help Financial Management

Reference no: EM131179958

You estimate the economy will be really booming next year with 30% probability, and normal with 70% probability. Your analysis of an airline company suggests that the company stock will return 15% if the economy booms, and only 6% if the economy is normal. What is the standard deviation of this stock’s return?

Reference no: EM131179958

Questions Cloud

Sell new shares of stock : Your firm is expanding and you need $18 million to help fund this growth. You estimate that you can sell new shares of stock for $30 a share. You also estimate that it will cost you $330,000 for legal, accounting, and other costs related to the stock..

The cpu fetch-execute cycle : A von Neumann machine has a random-access memory and each successive operation can read or write any memory location, independent of the location accessed by the previous operation and also has a CPU with one or more registers that hold data that are..

How it will be achieved and perceived by customers : Company overview o Mission statement - the purpose of the business o Vision statement - what the business desires to achieve in the long run o Business Core Values - the operating philosophy and principles that will guide the intern al business co..

Describe different types of loans made by a commercial bank : Describe the different types of loans made by a commercial bank. - Mat does a banker need to know in order to decide whether to make a loan?

What is the standard deviation of this stock return : You estimate the economy will be really booming next year with 30% probability, and normal with 70% probability. Your analysis of an airline company suggests that the company stock will return 15% if the economy booms, and only 6% if the economy is n..

Limitations and criticisms of positive accounting theory : Discuss the limitations and criticisms of Positive Accounting Theory. In your answer, you should clearly indicate whether or not you agree with these perceived shortcomings of PAT and why.

Calculate the lift coefficient of a circular arc : The software FoilSimU III was developed by the NASA and can be obtained at {http://www.grc.nasa.gov/ www/K-12/UndergradProgs/index.htm}.

How to motivate employee in the workplace : Topic: How to Motivate Employee's in the Workplace.

Explain what is meant by the term harvesting : Explain what is meant by the term harvesting. - .What is involved in harvesting an investment in a privately held firm?

User Account

All Pages