User Account

All Pages

What is the standard deviation for stock

Assignment Help Finance Basics
Reference no: EM133003006

Mountain stock is expected to earn 18% in a boom, 8% in a normal economy, and lose 2% in a recession economy. The probability of a boom is 20% while the probability of a normal economy is 55% and the chance of a recession is 25%. The Canadian treasure-bill rate is 1.5% and the market risk premium is 3%.

A) What is the expected rate of return on this stock?

B) What is the standard deviation for this stock?

C) If the beta for this stock is 0.9, what is New West Chocolate Mountain's reward to risk ratio?

D) Based on the reward-to-risk ratio, if you were an investor, would you buy this stock? Explain.

Reference no: EM133003006

Questions Cloud

Examine the rationale for the transaction : a. Sovereign wealth funds (SWF) are an important participant in financial markets. Appraise their role in the financial mark
Why a manager might submit a biased budget estimate : Budgeting could influence the behaviour, Why a manager might submit a biased budget estimate. How do you guard against this?
What opportunities are offered by new technology : What opportunities are offered by new technology to boost business profitability
Estimate total cost of may raw material purchases : Material on hand equal to 25% of the next month's production needs. Use this information to estimate total cost of May's raw material purchases.
What is the standard deviation for stock : Mountain stock is expected to earn 18% in a boom, 8% in a normal economy, and lose 2% in a recession economy. The probability of a boom is 20% while the probabi
Beneficiary in rohan situation : Rohan, age 47, is an entrepreneur with a business that sells children's toys made entirely of wood. The business has its ups and downs but he and his family mak
Determining the price of company shares : Norah Inc. has just paid an annual dividend of €1.99. Analysts forecast a 6% per year increase in company's profits over the next four years. Beyond that, Norah
Estimate dollar value of february expected cash collections : Widget manufacturing Company began operations on January 1. Estimate the dollar value of February Expected Cash Collections from Customers.
Economic implications of poor corporate governance : The economic implications of poor corporate governance in public companies is likely to be greater than for private companies. Do you agree or disagree? Why?

Reviews

Write a Review

Finance Basics Questions & Answers

  What three components of cash flow may exist

What three components of cash flow may exist for a given project? How can expansion decisions be treated as replacement decisions? Explain

  The birthplace of glenn miller

Clarinda Community Hospital is a 230-bed, not-for-profit, acute care hospital located in Clarinda, Iowa. The city is a typical Mid-western county seat/farming community best known as the birthplace of Glenn Miller, the famous big band leader of the l..

  Full cost of the superfund cleanup

The EPA goes after that trucking company for the full cost of the SUPERFUND cleanup. Is that fair? Why/Why NOT?

  Examine the concept of time value of money

Examine the concept of time value of money in relation to corporate managers. Propose two (2) methods in which time value of money can help corporate managers in general

  Authors mean by a meta-decision

What do the authors mean by a meta-decision? Please explain.

  Describe how such a shift could benefit the operations

Describe how such a shift could benefit the operations of the entire channel and how manufacturers could take advantage of the shift.

  Who are entitled to the dividend

Caterpillar (CAT) announced on Dec. 12, 2012 that it would pay a last quarter dividend of $0.52 on Dec. 31, 2012. The date of record was Dec. 24, 2012.

  Define and explain the pros and cons of npv

What circumstance would project evaluation methods be used and Define and explain the pros and cons of NPV, IRR, and Payback methods?

  Which prices was the order triggered and executed

To protect her profit, one month later, Rudy places an order to sell 500 shares of GNE at 85 stop 83 limit. The ticker following entry of the order is as follow

  Determining the enterprise value jvg inc

JVG Inc., is interested in acquiring Hats 'R' Us, Inc. JVG's CFO has examined similar acquisitions that have occurred in the industry and has found

  What factors inhibit recruitment efforts by organizations

In addition to the economy, what factors inhibit recruitment efforts by organizations? Have you ever witnessed this yourself or dealt with it another way?

  What activities are involved in managing the company cash

What activities are involved in managing the company’s cash flows?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd