What is the expected standard deviation of the stock

Reference no: EM13279638

You are interested in buying a stock that has a price of $72. You have projected that next year there is: a 10% probability the stock will equal $10, a 20% probability the stock will equal $38, a 30% probability the stock will equal $73, a 30% probability the stock will equal $100, and a 10% probability the stock will equal $150. Answer the following (showing all work):

(a) what is the expected return on the stock if you buy today and sell next year?

(b) what is the expected standard deviation of the stock?

Reference no: EM13279638

Questions Cloud

How much interest would the company save : How long would it take for S&S Air to pay off the smart loan assuming 30-year traditional mortgage payments?

How much of the first payment goes toward principal : Prepare an amortization table for the first six months of the traditional 30 year-mortgage.

What are the payments for a 20 year traditional mortgage : What are the monthly payments for a 30 year traditional mortgage?

Should the firm borrow the funds : Regis Clothiers can borrow form its bank at 11 percent to take a cash discount. The terms of the cash discounts are 2/15 net 60.Should the firm borrow the funds?

What is the expected standard deviation of the stock : what is the expected return on the stock if you buy today and sell next year?

Calculate the real rate of return on the stock : You purchased 200 shares of stock for $23 per share exactly one year ago. During the year, the stock paid a $1.10 dividend per share and the current stock price is $18 per share. The inflation rate the last year was 2%.

Draw a force diagram of the box : a heavy box of school books (mass is 50kg) was set down at rest on an inclined street (theta = 30 degrees). Draw a force Diagram of the box

What effect will this growth have on funds : The Firm has a 9 percent return on sales and pay 40 percent of profits out as dividends. What effect will this growth have on funds? If the dividend payout is only 15 percent, what effect will this growth have on funds?

At what rate is thermal energy generated in that loop : If 50.0 cm of copper wire (diameter 1.00 mm) is formed into a single circular loop and placed perpendicular to the uniform magnetic field that is increasing at a constant rate of 10.0 mT/s, at what rate is thermal energy generated in that loop.

User Account

All Pages