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

Microeconomic theory, Homer consumes only donuts and beer. When he consumes...

Homer consumes only donuts and beer. When he consumes less than 10 beers, Homer would gladly drink one more. After drinking 10 beers, Homer is so drunk that he does not notice any

Cost function, function with equation,variable,parameter

function with equation,variable,parameter

Movements in demand, diagram of extension and contraction in demand?

diagram of extension and contraction in demand?

Risk loving persons, Risk Loving - A person is a risk loving if they sh...

Risk Loving - A person is a risk loving if they show a preference toward the uncertain income over a certain income having same expected value. Examples: Gambling, some

Terms of trade, Terms of Trade: The ratio of average price of a country's e...

Terms of Trade: The ratio of average price of a country's exports, to average price of its imports, is its terms of trade. Theoretically an improvement in a country's terms of trad

Determinant of price elasticity of supply, Assume there is a remote area in...

Assume there is a remote area in china with high population.The area is composed exclusively of apartments and is populated by low-income residents .The people tend to stay in that

Tranasctions and strategies by michaels, some fields have large enough quan...

some fields have large enough quantities of both oil and ntural gas taht coordination must be achieved for the production of both, reather than oil alone as in our examples. will f

Natural research, Biochemistry is regarded a dull topic. Not many learners ...

Biochemistry is regarded a dull topic. Not many learners like to research it in school since it includes a thorough comprehension of issue and clinical changes in the framework, fr

Explicit cost, Explicit cost: Explicit costs are payments made by the ...

Explicit cost: Explicit costs are payments made by the firm when it purchases or hires factors of production for the production of goods and services. They are also referred t

Health Reform, Healthcare Reform is currently in the news almost every day....

Healthcare Reform is currently in the news almost every day. The current approach proposes a government sponsored health insurance “market” to help control costs and make healthcar

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