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1. Calculate the return and standard deviation for the following stock, in an economy with five possible states. If a Boom (Probability=25%) economy occurs, then the expected return is 50%. If a Good (Probability=25%) economy occurs, then the expected return is 25%. If a Normal (Probability=20%) economy occurs, then the expected return is 15%. If a Bad (Probability=20%) economy occurs, then the expected return is 0%. If a Recession (Probability=10%) economy occurs, then the expected return is -18%. Show your work.
2. You are an investor in common stock, and you currently hold a well-diversified portfolio which has an expected return of 10 percent, a beta of 1.2, and a total value of $ 14 ,000. You plan to increase your portfolio by buying 100 shares of AT&E at $ 33 a share. AT&E has an expected return of 11 percent with a beta of 1.7. What will be the expected return of your portfolio after you purchase the new stock? Enter your answer to the nearest .1%.Show your answer as a whole number, thus 12.4% would be 12.4 rather than .124. Show your work.
3. Calculate the required rate of return for Mercury Inc. to the nearest .1 Assume that investors expect a 4.0 percent rate of inflation in the future. The real risk-free rate is equal to 1.6 percent and the market risk premium is 8.9 percent. Mercury has a beta of 0.7 , and its realized rate of return has averaged 14.5 percent over the last 5 years. Show your work.
if you were a credit analyst who approved or disapproved commercial loans which financial statements and financial
2) An example of a primary market transaction is
If an investor bought 2 XYZ Feb 60 call at 2 and Sells 2 XYZ Feb 70 calls at 1. What's the gain or loss on the contracts at a market of 75? What type of strategy is the investor using?
suppose that brown-murphies common shares sell for 20.50 per share that the firm is expected to set their next annual
The annual expected dividend on the S&P index was about 154.6. If the dividend is expected to grow at a steady rate of 8% a year and the required annual rate of return is 10%, what is the value of the index? a. 1193 b 1700 c 7730 d none of these
Explain assessing the return compared with the overall market return and what net return did you earn on your share investment
Doherty Industries wants to invest in a new computer system. The company only wants to invest in one system, and has narrowed the choice down to System A and System B.
What are some of the weakness of the repricing model? How have large banks solved the problem of choosing the optimal time period for repricing? What is runoff cash flow, and how does this amount affect the repricing model’s analysis?
Assume a large physician group practice has a low return on equity (ROE). How could Du Pont analysis be used to identify possible actions to help boost profitability?
lanny and shirley are recently divorced and do not live together. shirley has custody of their child art and lanny pays
explain the role of cash and of earnings when a corporation is deciding how much if any cash dividends to pay to common
a. set up an amortization schedule for a 10000 loan to be repaid in equal installments at the end of each of the next 5
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