What is the standard deviation of the expected returns

Assignment Help Finance Basics
Reference no: EM133002239

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 11% return. Likewise, if the economy is poor, you estimate a -16% return for that same stock. The risk-free rate is 4.2%. What is the standard deviation of the expected returns for this stock? (Answer to the nearest tenth of a percent, but do not use a percent sign).

Reference no: EM133002239

Questions Cloud

Calculate yield to maturity per annum : Calculate yield to maturity per annum of 8 year zero coupon government bond with par value of $1,000 selling for $755.6.
How would use the variance analysis process : The analysis-referred to as variance analysis, How would use the variance analysis process as it relates to your future career as a hairdresser/salon owner?
What is the post-merger eps of abc : ABC Corporation is projected to earn $186.1 million next year, 17.0 million shares outstnding. The firm is planning to buy DEF Corp for 200 million in cash.
Explain three strategies used by fund managers : Explain three strategies used by fund managers where index futures are used to hedge the risk involved in the strategy.
What is the standard deviation of the expected returns : What is the standard deviation of the expected returns for this stock? (Answer to the nearest tenth of a percent, but do not use a percent sign).
How could you diversify your personal finances : What are some ways in which your personal finances are not diversified? Either in terms of the assets you have, or the income you earn?
What is the total amount of product costs incurred to make : Kubin Company's relevant range of production, For financial accounting purposes, what is the total amount of product costs incurred to make 24,500 units?
Compute the lump sum : When Terrence retire in 25 years, they hope to have a retirement income of about $60,000 per year and estimate 20 years in retirement.
How three financial statements can be used separately : How three financial statements can be used separately and together in the financial management of the firm. Include the equation, starting point

Reviews

Write a Review

Finance Basics Questions & Answers

  Competency standards of current business

How would you ensure that your personal knowledge and skills meets the required competency standards of this current business qualification

  What price will you pay for it

If you buy the bond from a dealer today, what price will you pay for it? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

  What is amount arising from operating current liabilities

Accounts payable = $1 million; notes payable = $1.1 million; short-term debt = $1.4 million; What is amount arising from operating current liabilities

  Maturity and a market interest rate

Compute the price of a 3.8 % coupon bond with 18 years left to maturity and a market interest rate of 6.8 percent. Solve using semi-annual compounding

  What is your conclusion on the null hypothesis

Perform a statistical test to see whether the average age of customers in the population is less than 46.4. Use the critical value approach and a 0.05 level of significance?

  Information in the tables above

Based on this information and the information in the tables above, what is the probability that someone

  How to maintain statutory records

An Australian Credit Licencee must maintain statutory records; such as financial records, membership certificates, insurance policies, training and risk assessm

  Compute the present equivalent cost

The initial cost of the rig is $45000 and the estimated salvage value after four years is $15000. Compute the present equivalent cost of the rig using 12% interest rate.

  What will be the monthly loan payment

What will be the monthly loan payment? Do not round intermediate steps. Round your answer to the nearest cent What will be the loan's EAR? Do not round intermediate steps. Round your answer to two decimal places

  What is the european quote based on this information

Assume a pair of pants imported from Mexico costs $15.00 (USD). The same pair costs 105 Pesos in Mexico. What is the European quote based on this information?

  What is the cost of equity according to the capm

The risk-free rate is 1.5 percent and the market premium is 10.6 percent. What is the cost of equity according to the CAPM?

  Concept of consumer surplus

How do pricing structures like these relate to the concept of consumer surplus?

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!

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