What is the variance of the stock

Assignment Help Financial Management
Reference no: EM131905549

The return on shares of Valley Transporter is predicted under the following various economic conditions:

Recession -0.10

Normal +0.05

Boom +0.20

If each economy state has the same probability of occurring, what is the variance of the stock?

Reference no: EM131905549

Questions Cloud

Estimates for market as whole in same economic states : Estimates for the market as a whole in the same economic states are -12% in recession, +10% in moderate growth, and +24% in boom.
What would be expected return of portfolio consisting : What would be the expected return of a portfolio consisting of 50% Toyota and 50% Honda?
What is expected return of portfolio : What is the portfolio weight of each stock? What is the expected return of your portfolio?
Calculate the variance of portfolio consisting : Calculate the variance of a portfolio consisting of 50% Toyota and 50% Honda.
What is the variance of the stock : If each economy state has the same probability of occurring, what is the variance of the stock?
What is the standard deviation of orange : The return on shares of the Orange Company are predicted under the following states of nature. What is the standard deviation of Orange?
How many pounds of coffee beans using supply contracts : To hedge its profits from fluctuations in coffee prices, Carlos G.M. should lock in the price of how many pounds of coffee beans using supply contracts?
What should be the value of put : If the effective annual risk-free rate of interest is 6% and there are four months until expiration, what should be the value of the put?
What is effective annual rate of warehousing arrangement : The Abhee H. Reatail is considering using a public warehouse loan as part of its short-term financing. What is effective annual rate of warehousing arrangement?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the amount of the firms current assets

Killer Whale, Inc. has the following balance sheet statement items: total current liabilities of $885,517; net fixed and other assets of $1,698,610; total assets of $2,852,030; and long-term debt of $655,703. What is the amount of the firm’s current ..

  Compute the standard deviation of monthly returns

The past five monthly returns for Kohl’s are 3.62 percent, 3.82 percent, −1.76 percent, 9.29 percent, and −2.64 percent. Compute the standard deviation of Kohls’ monthly returns.

  What is the project cash flow for the first year

Steamboat Springs Furniture, Inc., is considering purchasing a new finishing lathe that costs $63,101.00. The lathe will generate revenues of $95,995.00 per year for five years. What is the project cash flow for the first year of the project?

  Find the account balance immediately after last withdrawal

Find the account balance immediately after the last withdrawal.

  What is the risk-neutral probability that the stock price

A stock price is currently $100. Over each of the next two six-month periods it is expected to go up by 12% or down by 6%. The risk-free interest rate is 5%. What is the risk-neutral probability that the stock price will increase each period? (Report..

  Precisely the replicating portfolio strategy for straddle

Using the Black-Scholes formula, describe precisely the replicating portfolio strategy for the straddle (using only the underlying stock and cash).

  Central bank have to respond in order to currency peg

Oil prices reached above $100 a barrel several years ago. Suppose you are a member of the monetary policy committee of a small open economy, dependent on oil imports, which also wants to maintain a currency peg to the dollar. Describe the pressures t..

  Equity financing at company operating capital cost

Melangkah Lagi is a company that uses 100% equity financing at a company's operating capital cost of 20%.

  The allowance for doubtful accounts

During 2012, abc company had $500,000 net credit sales. Accounts receivable has a December 31, 2012, balance of $100,000. No amounts have been added to the allowance for doubtful accounts during 2012. Before adjustment on December 31, 2012 the net cr..

  What is the highest expected return these bonds could have

Ralston Purina had AA-rated, 10-year bonds outstanding with a yield to maturity of 2.46%. What is the highest expected return these bonds could have?

  How much are the total assets of the firm

The following items are components of a traditional balance sheet. How much are the total assets of the firm?

  What nominal interest rate is aerotron paying on the loan

Aerotron Electronics has just bought a used delivery truck for $15,000. What nominal interest rate is Aerotron paying on the loan?

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