User Account

All Pages

Covariance between the returns of stock a and b

Assignment Help Finance Basics
Reference no: EM132638475

Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 0.11 and 0.15, respectively. (Round your answer to 4 decimal places. For example .1244)

Probability Return(A) Return(B)
Good 0.35 0.30 0.50
OK 0.50 0.10 0.10
Poor 0.15 -0.25 -0.30

Reference no: EM132638475

Questions Cloud

Explain the reasons for the recent popularity of data mining : What are the main reasons for the recent popularity of data mining? Discuss what an organization should consider before making a decision to purchase.
Increase the riskiness of the company : Why might she or he want to increase the riskiness of the company? How would this affect the stakeholders?
Calculate the lump sum amount of superannuation tom : calculate the lump sum amount of superannuation Tom needs to have at 67, in order to achieve his target payment of $60,000 each year for 16 years.
Calculate the current ratio : The balance sheet of Mister Ribs Restaurant reports current assets of $36,000 and current liabilities of $22,500. Calculate the current ratio
Covariance between the returns of stock a and b : Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B.
Examine the sensitivity of project to the discount? rate : Examine the sensitivity of this? (base-case scenario) project to the discount? rate, management would like to compute the NPV for different discount rates
Which is best case at first iteration of quicksort algorithm : Please generate an array with 11 elements, which is the best case at the first iteration of QUICKSORT algorithm and then is the worst case for both subarrays.
Exploring tax cuts-jobs and tax revenue : Do you think that the tax cuts of the Tax Cuts and Jobs Act will increase economic growth and taxable income so much that tax revenue will increase?
What is the dollar amount of dividends : What is the dollar amount of dividends that he received for owning the stock during the year? Round to two decimal places.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the required rate of return on the stock

The dividend is expected to grow at 10.98% each year. If the stock is currently selling for $282.63, what is the required rate of return on the stock?

  Mean weight of passengers in commercial boats

The United States Coast Guard assumes the mean weight of passengers in commercial boats is 185 pounds. The previous value was lower, but was raised after a tragic boating accident.

  Retained earnings and the wacc

Find the WACC using retained earnings and the WACC when new equity is issued.* A company has a WACC1=12.5% for funding up to $4 million when retained earnings are used.They also have a WACC2=13.7% for funding above $4 million when new equity is ra..

  What is richards incremental profit

What is Richard's incremental profit if he chooses option 3 over option 2?

  Terence and bradley are both buying new homes

Terence and Bradley are both buying new homes. Each of their homes are being purchased for $350,000 and each are putting down 20%.

  What should be the market price of the bond

If the discount rate is 7% compounded semiannually, what should be the market price of the bond?

  Analysis of 60 monthly rates of return on united futon

analysis of 60 monthly rates of return on united futon common stock indicates a beta of 1.45 and an alpha of .2 percent

  Calculate minimum price per unit

Assume Educate Comp knows its fixed costs are $100,000, its variable expenses are $500 per copy of Alge Comp, and they must to sell 15000 copies of Alge Comp to break even 1st year.

  Find the breakeven stock prices at expiration

Find the breakeven stock prices at expiration. Explain why one would want to use a strangle.

  A mortgage company offers to lend you 85000 the loan calls

a mortgage company offers to lend you 85000 the loan calls for payments of 8273.59 per year for 30 years. what

  Record the cash collection

Pearl E. White Orthodontist specializes in correcting misaligned teeth. During 2012, Pearl provides services on account of $580,000. Of this amount, $70,000.

  What is rogue transport cost of retained earnings

Analysts expect Rogue Transport's dividends to grow by 6% per year for the foreseeable future. Using the capital asset pricing model, what is Rogue Transport's cost of retained earnings?

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