Calculate the expected value, Microeconomics

Assignment Help:

1) Investments

1A)

What are the two components to total return?  What does expected value measure?  What does standard deviation measure?  How can each result be used to help us purchase securities?

1B)

DATE

PRICE

DIVIDEND

Jan 2000

100.00

0.00

Jan 2001

121.55

2.25

Jan 2002

139.81

2.55

Jan 2003

138.01

2.02

Jan 2004

141.22

1.01

Jan 2005

204.23

3.09

Jan 2006

201.29

2.98

Jan 2007

169.31

1.92

Jan 2008

141.40

1.33

Jan 2009

140.55

1.25

Jan 2010

139.02

1.11

Calculate the total return:

From Jan 2000 to Jan 2010

From Jan 2000 to Jan 2003

From Jan 2003 to Jan 2004

Calculate the standard deviation of price

From Jan 2001 to Jan 2002

From Jan 2002 to Jan 2008

2)   Equities

2A)

Why is a healthy equity market important for a country?

What alternatives exist for funding if companies can't raise money in the equity markets?

2B)

Calculate the share price of a company the pays a fixed dividend of £2.30 pa when the required rate of return demanded by equity investors is 3%.  What will the price be if investors demand 12% to hold these same shares?  What will be the price if investors demand 3% to hold these same shares?

What will the share price be under all three scenarios if dividends grow by a rate of 1.5% pa?


Related Discussions:- Calculate the expected value

Market supply of labour, graphical illustrations describing the influence o...

graphical illustrations describing the influence of an increase in immigrants on the market supply of labour

What are the policies and long-run growth of us, What are the Policies and ...

What are the Policies and Long-Run Growth In many concerns it is decidedly odd that world distribution of output per worker is as unequal as it is. Migration, World trade and f

Non-collusive oligopoly price and output determination, what is non- collus...

what is non- collusioligopoly and how its price and output is determined

Define the circular flow diagram, The circular flow diagram is used to repr...

The circular flow diagram is used to represent the interdependence that exists between sectors of the economy.  The diagram illustrates that there are various collections of same e

Determination of fixed exchange rate, DETERMINATION OF FIXED EXCHANGE RATE:...

DETERMINATION OF FIXED EXCHANGE RATE: In the flexible exchange rate regime, exchange rates are highly volatile which leads to uncertainties in the international payments/trans

Double jeopardy, Double Jeopardy A condition where an entrepreneur's m...

Double Jeopardy A condition where an entrepreneur's main source of income and net worth depend on the entrepreneur's organization.

ECS, The prevention of major swings in economic activity can be handled mos...

The prevention of major swings in economic activity can be handled most easily by the

Demand function, The Acme Bakery in the seaside resort town of Malvino sel...

The Acme Bakery in the seaside resort town of Malvino sells freshly baked bread to two categories of consumers: residents of the town and tourists. The weekly demand from touris

Equilibrium of a multi product firm, explain graphically Equilibrium of a ...

explain graphically Equilibrium of a multi product firm

Private, Question: (a) Using an example, differentiate between private...

Question: (a) Using an example, differentiate between private, social and external costs and benefits. (b) With the use of a diagram, describe the difference between profi

Write Your Message!

Captcha
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