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a. Boeing Company’s stock is currently trading at $160. Assume that the expected return on the stock is 13.5% per annum and its volatility is 22% per annum. What is the probability distribution for the stock price 12 months from now? Calculate the mean and standard deviation of the distribution. Determine the 99% confidence interval.
b. Repeat the above calculations by using a volatility of 25%.
c. Compare the midpoint of the intervals in a) and b) with the expected stock price and explain why the midpoint is different from the expected stock price.
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Master Card and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. If the APR is stated to be 15.00%, with interest paid monthly, what is the card's EFF%?
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Presently, Stock A pays a dividend of $2.00 a share, and you expect the dividend to grow rapidly for the next four years at 20 percent. After this initial period of super growth, the rate of increase in the dividend should decline to 8 percent. If yo..
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