What is the expected return for stock

Assignment Help Financial Management

Reference no: EM131931213

After studying the economy, you forecast that there is a 70% chance of a good economy next year and a 30% chance of a poor economy. If the economy is good, you estimate that a stock you have been following would have a 29% return. Likewise, if the economy is poor, you estimate a -6% return for that same stock. The risk-free rate is 4.7%. What is the expected return for this stock? (Answer to the nearest tenth of a percent, but do not use a percent sign).

Probability

Return

Good Economy

70%

29%

Poor Economy

30%

-6%

Risk-Free Rate = 4.7

Reference no: EM131931213

Questions Cloud

What did the researchers do to control for potential bias : Ask yourself, Is any bias evident in either study? What did the researchers do to control for potential bias? Are the data analysis and interpretation sound?

President and congress to make fiscal policy : The implementation lag is the time it takes for the President and Congress to make fiscal policy once the problem has been recognized.

Discuss the implementation and response lags : Discuss the implementation and response lags of the 2008/2009 economic recession

Defining key medical and financial terms : In this course, you will contribute to a group discussion defining key medical and financial terms from the healthcare system that apply to the case study.

What is the expected return for stock : you estimate a -6% return for that same stock. The risk-free rate is 4.7%. What is the expected return for this stock?

Foreign exchange market : Explain what S and D represent in the foreign exchange market.

Find the value of k and state the taguchi loss function : Find the value of k, and state the Taguchi loss function. What is the economic loss associated with x = 0.215?

Should trimline frames use the new materials : What is the additional benefit to Trimline Frames from using the new material and improving quality?Should Trimline Frames use the new materials?

Write a program to print out any sized multiplication table : CompSci 101 - Assignment- Write a program to print out any sized multiplication table between 1 to 20 . You will be adding your own functions to the program

User Account

All Pages