Calculate the standard deviation of expected returns

Assignment Help Finance Basics
Reference no: EM13261015

Stocks X and Y have the following probability distributions of expected future returns:

 

Probability X Y
0.1 -10% -25%
0.3 6 0
0.3 13 24
0.2 21 29
0.1 37 47





a.) Calculate the expected rate of return, rY, for Stock Y (rX = 12.60%.) Round your answer to two decimal places.

 

b.) Calculate the standard deviation of expected returns, ?X, for Stock X (?Y = 19.83%.) Round your answer to two decimal places.

 

c.) Now calculate the coefficient of variation for Stock Y. Round your answer to two decimal places.

 

Reference no: EM13261015

Questions Cloud

Find the mass of oxygen in the tank : A 1.5 m^3-volume tank holds oxygen gas (M = 32 g/mole) at the pressure of 500,000 Pa. The temperature is 27 C. Find the mass of oxygen in the tank (in kg)
Nitrogen gas may react with hydrogen gas to form hydrazine : Nitrogen gas may react with hydrogen gas to form hydrazine gas, N2H4, according to the reaction N2 + 2 H2 ---> N2H4. 10 L of N and 25 L H react to completion (the limiting reagent is converted entirely to hydrazine).
What observations were puzzling at first : What observations were puzzling at first, that challenged your initial hunch of what you thought you would find and what further questions have your observations proposed?
What is the daily interest savings of the system : Sherman's Sherbet currently takes about 10 days to collect and deposit checks from customers. A lock-box system could reduce this time to 6 days. Collections average $35,000 daily. The interest rate is .02% per day.
Calculate the standard deviation of expected returns : Calculate the standard deviation of expected returns, ?X, for Stock X (?Y = 19.83%.) Round your answer to two decimal places.
What is the maturity of the bond : ABC Inc.has a bond outstanding which pays 8% coupon compounding semi-annually. The current market price of the bond is $1,196 and the yield to maturity of the bond is 6%. What is the maturity of the bond.
What is the company ledger balance and available balance : The manager notes that only the $33,000 payment of the 27th has cleared the bank. What is the company's ledger balance and available balance with its bank?
Find what is the impulse response of the system : A causal LTI system has the difference equation y[n]+0.25y[n-1]-0.125y[n-2] = x[n]+x[n-1]. What is the impulse response of this system and what is it's output y[n] for input signal x[n] = (-1)^n u[n].
Explain hydrazine and dinitrogen tetroxide ignite : Hydrazine (N2H4) and dinitrogen tetroxide ignite on contact to form nitrogen gas and water vapor. How many grams of nitrogen gas form when 1.00 X 102 grams of N2H4 and 2.00 X 102 grams of N2O4 are mixed

Reviews

Write a Review

Finance Basics Questions & Answers

  Classify the cost as product or variable

The following are expenses are associated with manufacturing firms, merchandising companies, or service companies:

  Compute the contribution margin and fixed costs

Tyson Corporation bottles and distributes LO-KAL, a fruit drink. The beverage is sold for fifty cents per 16-ounce bottle to retailers, who charge customers 70 cents each bottle.

  Determine difference in the maturity risk premiums

An shareholder in Treasury securities expects inflation to be 2.5 percent in Year1,3. 2 percent in Year 2, and 3.6 percent each year thereafter. Assume that the real risk-free rate is 2.75 percent,

  What is the percentage price change of these bonds

Bond J is a 3 percent coupon bond. Bond K is a 9 percent coupon bond. Both bonds have 13 years to maturity, make semiannual payments, and have a YTM of 6 percent.

  How much would you be willing to pay for it today

The company's marginal tax rate is 40%. If you require a 20% rate of return on a stock such as this, how much would you be willing to pay for it today?

  What value would mm now estimate for each firm

Assume that (1) all of the MM assumptions are met, (2) both firms are subject to a 40% federal-plus-state corporate tax rate, (3) EBIT is $2 million and (4) the unlevered cost of equity is 10%

  A defined contribution pension plan

a defined-contribution pension plan

  What is this projects equivalent annual cost

If the required return is 11 percent, what is this project's equivalent annual cost, or EAC?

  Compute the cost of preferred stock

ABC corporation can sell preferred stock for $70 with an estimated flotation cost of $2.50. It is anticipated that the preferred stock will pay dollar six each share in dividends.

  Discuss the various uses for break-even analysis

Determine what factors would cause a difference in the use of financial leverage for a utility corporationand an automobile company?

  Compute the real rates of return

At the starting of last year, you invested $4,000 in 80 shares of the Chang company. During the year, Change paid dividends of $5 per share.

  Computation the present value of the portfolio of investment

Computation the present value of the portfolio of investments and what is the present value of her inheritance

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!

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