The return on the stock have standard deviation

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1. A stock is selling for $55. the risk free rate is 3% and the return on the stock have a standard deviation of 30%. Using a one step binomial tree, the forecasted up node price of the stock in 12-month is _______.

2. Out of the six capital budgeting decision criteria (NPV, IRR, MIRR, PI, payback, and discounted payback), which do you find the most interesting? Why?

3. Two assets have a correlation of -1 and a standard deviation A of 7%, standard deviation B of 8%, an expected return A of 8%, an expected return B of 16%. what is the treasury rate of the economy?

Reference no: EM131887802

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