Using the table of returns and probabilities

Assignment Help Financial Management

Reference no: EM13971944

Barbara is considering investing in a stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment. Using the table of returns and probabilities below, find Probability Return Boom 0.5 25.00% Good 0.2 15.00% Level 0.1 10.00% Slump 0.2 -5.00% What is the expected return on Barbara’s investment? (Round answer to 3 decimal places, e.g. 0.076.) Expected return LINK TO TEXT What is the standard deviation of the return on Barbara's investment? (Round intermediate calculations and answer to 5 decimal places, e.g. 0.07680.) Standard deviation

Reference no: EM13971944

Questions Cloud

Calculate the amount of the firms gross profit : Evening Story Corporation has sales of $4944222; income tax of $571164; selling, general, and administrative expenses of $282528; depreciation of $306623; cost of goods sold of $2520358; and interest expense of $188280. Calculate the amount of the fi..

What is the amount of the firm net working capital : Scare Train, Inc. has the following balance sheet statement items: current liabilities of $818903; net fixed and other assets of $1352489; total assets of $2890520; and long-term debt of $861800. What is the amount of the firm's net working capital?

Calculate amount of firm after-tax cash flow from operations : Moby Dick Corporation has sales of $4823099; income tax of $568936; selling, general, and administrative expenses of $283026; depreciation of $301300; cost of goods sold of $2771426; and interest expense of $197396. Calculate the amount of the firm's..

Calculate the amount of the firm income before tax : Banana Box Corporation has sales of $4370130; income tax of $397323; selling, general, and administrative expenses of $290597; depreciation of $378588; cost of goods sold of $2784698; and interest expense of $127186. Calculate the amount of the firm'..

Using the table of returns and probabilities : Barbara is considering investing in a stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment. Usi..

What is the future value of these investment cash flows : Trigen Corp. management will invest cash flows of $1,238,006, $1,143,422, $1,487,955, $818,400, $1,239,644, and $1,617,848 in research and development over the next six years. If the appropriate interest rate is 8.12 percent, what is the future value..

Examples of the factors that contribute to job satisfaction : Investigate two to three (2-3) reasons why diversity is important to an organization’s success. Speculate on the major potential ramifications to an organization if said organization does not practice diversity management. Give at least two (2) examp..

What is the present value of the cash flow stream : You wrote a piece of software that does a better job of allowing computers to network than any other program designed for this purpose. If the appropriate interest rate is 6 percent, what is the present value of the cash flow stream that the company ..

Invest the capital and live off the interest : Andrew is retiring. He has no pension but has capital of $500,000. Invest the capital and live off the interest. What are the advantages/disadvantages of each?

User Account

All Pages