Which stock would you consider to be riskier

Reference no: EM13298320

You have estimated the following probability distributions of expected future returns for Stocks X and Y:

Stock X Stock Y

Probability Return Probability Return
0.1 -10% 0.2 2%
0.2 10% 0.2 7%
0.4 15% 0.3 12%
0.2 20% 0.2 15%
0.1 40% 0.1 16%

a. What is the expected rate of return for Stock X? Stock Y?
b. What is the standard deviation of expected returns for Stock X? For Stock Y?
c. Which stock would you consider to be riskier? Why?

Reference no: EM13298320

Questions Cloud

How is the spent carbon removed from the pressure contactors : Testing has already been completed on the water and the Usage Rate for the carbon is 0.4 pounds of carbon per 1000 gallons of water treated. The required EBCT is 20 minutes and the carbon longevity must be at least 6 months.

What emf is induced across the wings : a metal airplane flies horizontally at 200. m/s where the Earth's magnetic fiels is vertical and is 45.0uT. If the wingspan is 25.0 meters. what emf is induced across the wings

Calculate the ph of a 1-l solution containing sodium acetate : Calculate the pH of a 1-L solution containing 0.01 M sodium acetate after the addition of 3 mL 0.5 M H2SO4

Determine the manning coefficient of channel roughness : A discharge of 2,200 ft^3/sec flows in a trapezoidal channel at a normal depth of 8.0 ft. The channel has a slope of 0.01, a 12-ft bottom width, and side slopes of 1:1 (H:V). Determine the manning coefficient of channel roughness

Which stock would you consider to be riskier : You have estimated the following probability distributions of expected future returns for Stocks X and Y.

Design an earthen channel section into sandy soil : An earthen channel will be excavated into sandy soil for which Vmax = 4.0 ft/sec, n = 0.022, and the recommended m = 3. The channel will have a bottom slope of 0.0011 and accommodate a design flow of 303 cfs. Design (size) the channel section.

Calculate the annual rate of depreciation : In two year you need to earn 3000$ if you get an interest rate of 15.75% compound annually, how much do you need to invest now

Design lined trapezoidal channel to carry on longitudinal : Design a lined trapezoidal channel to carry 20 m^3/sec on a longitudinal sloe of 0.0015. The lining of the channel is to be float-finished concrete (n=0.015). Consider (a) the best hydraulic section and (b) the section with side slopes 1.5:1 (H:V)

Calculate the net working capital at the end of 2005 : Lennox Furniture Company's 2005 balance sheet showed total current assets of $1,200,000. All of the current assets were required in operations, and its current liabilities consisted of $400,000 of accounts payable and $100,000 of accrued wages and..

User Account

All Pages