User Account

All Pages

Determine expected return and standard deviation of returns

Assignment Help Financial Accounting
Reference no: EM132790261

Possible returns of a particular firm's common stock over the coming year is given according to the different investor's sentiment below:

                                 Investor's Sentiment
                            p                           r
Negative            15.00%               5.00%
Neutral                21.00%              8.00%
Positive                64.00%               17.00%

Problem 1: Using the stock information presented above, determine the expected return, the standard deviation of returns, and the covariance for each investor's sentiment.

Group of answer choices

Option 1: 13.31 % expected return equation, 5.0% standard deviations of returns, 6.67 Covar_Negative, 2.98 Covar_Neutral, and .46 Covar_Positive

Option 2: 12.18 % expected return equation, 4.0% standard deviations of returns, 5.14 Covar_Negative, 1.80 Covar_Neutral, and .40 Covar_Positive

Option 3: 11.30 % expected return equation, 5.0% standard deviations of returns, 6.02 Covar_Negative, 1.00 Covar_Neutral, and 1.80 Covar_Positive

Option 4: 15.00 % expected return equation, 3.8% standard deviations of returns, 7.06 Covar_Negative, 3.54 Covar_Neutral, and 1.55 Covar_Positive

Reference no: EM132790261

Questions Cloud

Explain why the long run as curve is vertical : Explain why the long run AS curve is vertical Think about - how AD/AS curves shift to set long term equilibrium?
Determine the estimated total cost and cost per unit : Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 90 units of EZRecords
Capturing business cyclical swings : Nominal GDP growth does a better job than real GDP growth in capturing business cyclical swings (phases of business cycles contraction, expansion etc.)
Relationship between current account surplus and exchange : The Indian rupee depreciated by 2.6% in 2020 despite record dollar inflows coming into the country, thanks to the Reserve Bank of India's (RBI) relentless absor
Determine expected return and standard deviation of returns : Possible returns of a particular firm's, Determine the expected return, the standard deviation of returns, and the covariance for each investor's sentiment.
How much money will have in twenty-two years : Suppose you invest $28,173 into a mutual fund that is expected to earn a rate of return of 7.04%. How much money will you have in 22 years?
What is the future value of all cash flows : Assume that you are going to receive $571 yearly, What is the future value (the day of your retirement) of all these cash flows if the interest rate is 8.65%
What are the consequences for the labour supply : What are the consequences for the labour supply? Do you think this is a plausible explanation of what really happened? What do you think this model is missing?
What interest rate investment have to yield for jason : Jason has $2400 that he is hoping to invest. What interest rate would the investment have to yield in order for Jason's brother to deliver on his promise?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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