Standard deviation of the rate of return on investment

Assignment Help Financial Management

Reference no: EM131340374

Suppose you have a project that has a 0.4 chance of tripling your investment in a year and a 0.6 chance of doubling your investment in a year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.)

Reference no: EM131340374

Questions Cloud

Shareholders wealth and corporate social responsibility : Given the many unethical business practices that have occurred over the past several years, it is obvious that there are consequences between maximizing shareholders wealth and corporate social responsibility.

A valuable firm will tend to : The explicit and implicit costs associated with corporate default are referred to as the _____ costs of a firm. A valuable firm will tend to:

What is the difference between the ratios : In the problems following, use an equity risk premium of 5.5 percent if none is specified. 1. If you were told that the average exercise price of the 50 million options in the previous problem was $6, estimate the value per share for ABV using the tr..

Bond is current yield better estimate of yield to maturity : Two bonds have 10 years to maturity. Bond A has a coupon rate of 2.45% and a price of 99.805 (% of FV). Bond B has a coupon rate of 5.90% and a price of 105.214 (% of FV). The bonds make semi-annual coupon payments. Which bond is selling at a premium..

Standard deviation of the rate of return on investment : Suppose you have a project that has a 0.4 chance of tripling your investment in a year and a 0.6 chance of doubling your investment in a year. What is the standard deviation of the rate of return on this investment?

Example of primary or secondary market transaction : How does a cost-efficient capital market help reduce the prices of goods and services? Describe the different ways in which capital can be transferred from suppliers of capital to those who are demanding capital. Is an initial public offering an exam..

Firm is operating at its optimal capital structure : Which of these will occur in a world with taxes and financial distress when a firm is operating at its optimal capital structure?

Current yield on this bond on the date of issue : U.S. Treasury issued 30-year to maturity bonds with a 2.875% coupon. The price was 99.461607 (% of par value). The bond makes semi-annual coupon payments and has a minimum face value of $100. What are the coupon rate and the current yield on this bon..

Based on your understanding of the trade-off theory : Based on your understanding of the trade-off theory, what kind of firms are likely to use more leverage?

User Account

All Pages