User Account

All Pages

Calculate the expected return on share

Assignment Help Finance Basics
Reference no: EM132618773

The following table provides the share return forecasts and associated probabilities for X Coy. and Y Coy. Answer parts 'a' to 'c' using the information provided. Detailed worked solutions must be presented in your answers, including formulae used, progressive and final answers to the questions.

X coy y coy

Return % Probability% Return % Probability%

17.0 60 20.0 30

12.0 20 10.0 20

10.0 20 8.0 50

(a) Calculate the expected return on each share.

(b) Calculate the variance and standard deviation for each share.

(c) Suppose a portfolio comprised of 70% investment in X Coy. and 30% investment in Y Coy. can be constructed. An analyst has estimated that the correlation coefficient of the two-asset portfolio is -0.30, calculate the return and standard deviation of this portfolio. Compare your answer with those reported in parts a. and b. and draw your conclusion.

Reference no: EM132618773

Questions Cloud

How did the covid-19 affect the exchange rates : The outbreak of coronavirus named COVID-19, emerged in Wuhan/China first, has brought numerous effects on our lives.
What is the value of the fund today : If the fund earns 10 percent compounded annually, what is the value of the fund today?
What is the amount of depletion that Camel should expense : During 2020, 250,000 tonnes were removed and 200,000 tonnes were sold. What is the amount of depletion that Camel should expense for 2020
How do calculate the vwap benchmark : Finally the market closes at 4 PM, when the best bid and ask prices are $35.91 and $35.94, respectively. Calculate the VWAP benchmark?
Calculate the expected return on share : The following table provides the share return forecasts and associated probabilities for X Coy. and Y Coy. Answer parts
Calculate Ingrid balance in accounts receivable on December : During 2018, Ingrid extended credit for $3,075,000 of sales, collected $2,715,000. Calculate Ingrid's balance in accounts receivable on December
Critically evaluate the dividend discount model : Critically evaluate the Dividend Discount Model approach to share valuation
Global economy require commitment to professional excellence : The global economy requires a commitment to professional excellence and integrity, achievable through establishing habits of self-reflection, life-long learning
Find what is transaction cost according to twap benchmark : Another trader's order for 3,000 shares is executed at 2:16 PM at a price of $36.15. What is the transaction cost according to the TWAP benchmark?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd