Compute the expected return for security

Assignment Help Financial Management
Reference no: EM131830159

Compute the expected return for a security with the following projected returns.

state of the economy      probability (%)           Projected return

recession                               8                                    -14.52

moderate                                19                                    5.45

average                                 52                                     13.85

good                                        14                                      18.13

outstanding                             7                                        22.77

The expected return is? (round to 2 decimal places)

Reference no: EM131830159

Questions Cloud

Symmetric distribution : Show that if X and Y are independent, identically distributed random variables then X - Y has a symmetric distribution.
List five operations that any machine language must include : What does it mean when we say that a computer is a programmable device? List five operations that any machine language must include.
What are ethical issue involved with downloading source code : What are the ethical issues involved with downloading the source code and replacing your name and information on the page and using it on your home page?
Compute skipper total income tax expense : Assuming the U.S. tax rate is 35%, Compute Skipper's total income tax expense, current income tax expense, and deferred income tax expense
Compute the expected return for security : Compute the expected return for a security with the following projected returns.
Discuss the systems development life cycle : Outline the planning, analysis, design, and implementation phases. Develop in accordance with the systems development life cycle (SDLC).
Which of the problem-solving strategies do you use the most : Which of the problem-solving strategies do you use the most? Can you think of some others that you use? Would they be appropriate for computing problem solving?
How many bonds will the firm have to issue : Acme Inc. plans to issue 10-year, zero-coupon bonds to finance its capital expansion. how many bonds will the firm have to issue?
Compute the expected number of trials needed : Compute the expected number of trials needed in order for all faces of a symmetric die to have appeared at least once.

Reviews

Write a Review

Financial Management Questions & Answers

  What rate of return did he get on the investment

Darren purchased $250 000 in 364-day T-bills 315 days before maturity to yield 2.86%. After holding it for 120 days, Darren sold the T-bill for a yield of 3.25%. How much did Darren pay for the T-bills? When Darren sold the T-bills, what rate of retu..

  The merger will result in incremental net cash flows

Southern Dental Care is considering purchasing a smaller dental clinic, named John Dental Practice. Analysts of Southern Dental Care project that the merger will result in incremental net cash flows of $1 million in Year 1, $5 million in Year 2, $10 ..

  Cash flow be under the proposed capital structure of firm

What will Allison’s cash flow be under the proposed capital structure of the firm?

  The various defenses to or modifications of liability

Betsy Boomer does not own a car and she must rely on friends for transportation. Last month, Betsy asked Freda Farnsworth to drive her to the store. Freda is known to be a reckless driver, but Betsy is not in a position to be choosy. Describe Freda’s..

  When would it make sense to abandon the investment

We are examining a new project. We expect to sell 7,000 units per year at $38 net cash flow per unit for the next 10 years. The relevant discount rate is 16%, and the initial investment required is $1,040,000. What is the base-case NPV? If expected s..

  Company sold no new equity-what is sustainable growth rate

Emerson Equine Supplies earned $72,000 in 2012 and pad dividends of $44,640. The firm had equity of $150,000 at the beginning of the year. At the end of the year, the company had total assets of $195,000. During the year, the company sold no new equi..

  Policy superior to either variable life or term life policy

Ava Wong, a 38 year-old widowed mother of three children (ages 12, 10, and 4), works as a product analyst for a major consumer products company. Although she's covered by a group life insurance policy at work, she feels, based on some rough calculati..

  Margin and leverage

Margin and Leverage (LO3, CFA4) suppose the call money rate is 5.6 percent, and you pay a spread of 1.2 percent over that. You buy 1,000 shares at $40 per share with an initial margin of 50 percent. One year later, the stock is selling for $45 per sh..

  What are some reasons for either type of labor variance

Now let's discuss labor variances. Discuss the two labor variances that may occur, including how they are calculated. What are some reasons for either type of labor variance?

  If a country runs a current account deficit

If a country runs a current account deficit, are its exports of goods and services larger or smaller than its imports of goods and services? Briefly explain.

  Theory and applications when estimating wacc

What is the biggest gap between theory and applications when estimating WACC? And in your opinion, what are the key reasons to form such a big gap?

  Effect of the project NWC on the total NPV of the project

If the firm’s discount rate is 6%, what is the effect of the project’s NWC on the total NPV of the 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!

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