Reference no: EM132545548
A stock has the following predicted returns under the following economic conditions:
Economic Condition Probability Return (K)
Recession 0.30 50
Stable economy 0.30 100
Moderate growth 0.30 120
Boom 0.10 200
Question 1: Compute the
(i) Expected monetary value.
(ii) Standard deviation.
(iii)Coefficient of variation.
(iv)Return-to-risk ratio.
(b) The following are the average daily wages in kwachas of a group of industrial workers and price indices:
Year 1999 2000 2001 2002 2003 2004
Daily Wages 80 108 125 147 216 230
Consumer Price 100 120 125 140 180 200
Question 2:
Question 2.(a) Calculate the Real Wages, Money Wage Index and Real Wage Index
Question 2.(b) Calculate the purchasing power of kwacha for the year 2004 as compared to the year 1999. What is the significance of this result?
Question 2.(c) How much is the worth of one kwacha of 1999 in 2003?
Question 2.(d) In which year did the workers have the greatest buying power?
Question 2.(e) What percentage increase in daily wages for the year 1999 is required (if any) to provide the same buying power that the workers enjoyed in the year in which they had the greatest buying power?
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