Calculate the expected return and standard deviation

Assignment Help Corporate Finance

Reference no: EM132208218

Question - The stock of Business Adventures sells for $55 a share. It's likely dividend payout and end-of-year price depend on the state of the economy by the end of the year as follows:

	Dividend	Stock Price
Boom	$2.10	$65
Normal economy	1.40	58
Recession	.50	49

a. Calculate the expected holding-period return and standard deviation of the holding-period return. All three scenarios are equally likely.

b. Calculate the expected return and standard deviation of a portfolio invested half in Business Adventures and half in Treasury bills. The return on bills is 3%.

Reference no: EM132208218

Questions Cloud

How health care managers and leaders achieve better health : Analyze the key reasons why healthcare organization managers and leaders must understand and actively engage in the implementation of efficient health.

Define the issues of possible relevance : In the assessment of victims, pay special consideration to issues that may affect the ways in which the victims may react to your interventions.

What is one of the worst decisions you have had to deal : "If the people who make the decisions are the people who will also bear the consequences of those decisions, perhaps better decisions will result."

What was the strategic goal of this organization : What was the vision of this organization? What operations did they conduct? What was the overall effect of those operations conducted?

Calculate the expected return and standard deviation : Calculate the expected return and standard deviation of a portfolio invested half in Business Adventures and half in Treasury bills. The return on bills is 3%

What is the current market price of the bond : If the current interest rate is 9 percent, what is the current market price of the bond? Assume a par value of $1,000

Describe at least four of the most likely processes : Describe at least 4 of the most likely processes she will go through from the time the police arrive at the scene.

What the weights of each share in minimum variance portfolio : Joe is looking at two shares from LR Corp. and Computer Store. What are the weights of each share in the minimum variance portfolio

What is the cash flow on May : Your Company sells 20,000 gal of fuel to a customer for $3.00/gal on April 1, 2019. What is the cash flow on May 1, 2019

User Account

All Pages