Your friend is the owner of a stock which had returns

Assignment Help Financial Management
Reference no: EM13879603

Your friend is the owner of a stock which had returns of 25 percent, -36 percent, 1 percent, and 16 percent for the past four years. Your friend thinks the stock may be able to achieve a return of 50 percent or more in a single year. Based on these returns, what is the probability that your friend is correct?

a. greater than 0.5 percent but less than 1.0 percent

b. less than 0.5 percent

c. greater than 16.0 percent

d. greater than 2.5 percent but less than 16 percent

e. greater than 1.0 percent but less than 2.5 percent

Reference no: EM13879603

Questions Cloud

Best classified as unsystematic risk : Which one of the following is best classified as unsystematic risk?
Research the controversy of methadone maintenance treatment : Research the controversy of methadone maintenance treatment for heroin users. Answer the following: In what ways is the treatment helpful or harmful
Critiques the short-term finance policy : Write a one page memo that critiques the short-term finance policy of each company and explain which company has the better short-term finance policy. Justify your response.
Ironclad formula for projecting future dividend growth : Bob and I are looking at AT&T's stock because we are both very wealthy stock market investors. We usually spend summers together in the Swiss Alps (at his expense…you see, he likes me and we are pals). We agree on the expected dividend AT&T will be p..
Your friend is the owner of a stock which had returns : Your friend is the owner of a stock which had returns of 25 percent, -36 percent, 1 percent, and 16 percent for the past four years. Your friend thinks the stock may be able to achieve a return of 50 percent or more in a single year. Based on these r..
How are exchange rates determined? : How are exchange rates determined? What is the significance of currency devaluations to the home country? To other countries?
State this problem in standard form : Restate the objective function of this problem in such a way that it is technically a maximization problem, with a solution identical to a minimization problem given the constraints stated in part a.
Probability range of returns for any one given year : A stock has returns of 18 percent, 15 percent, -21 percent, and 6 percent for the past four years. Based on this information, what is the 95 percent probability range of returns for any one given year?
The internal rate of return : The internal rate of return:

Reviews

Write a Review

Financial Management Questions & Answers

  Find the nominal interest rate for a debt security

Find the nominal interest rate for a debt security given the following information: real rate = 2%, liquidity premium = 2%, default risk premium = 4%, maturity risk premium = 3%, and the inflation premium = 3%.

  What was your dividend yield on this stock

One year ago, you purchased a stock at a price of $32 a share. Today, you sold the stock and realized a total return of 25 percent. Your capital gain was $6 a share. What was your dividend yield on this stock?

  Calculate the present value of thefuture returns

A company issues debentures worth Rs. 100 crore and pays on interest of Rs. 10 crore at the end of 1year. What is the actual cost of debt if the prevailing tax rate is 40%?

  Pre taxed and taxed-what is your after tax return

You purchased a stock at the end of the prior year at a price of $101. At the end of this year the stock pays a dividend of $1.80 and you sell the stock for $117. What is your return for the year? Now suppose that dividends are taxed at 15 percent an..

  Explain the credit rating system

A good friend comes to you and says they have just learned that something called a credit rating on corporate bonds they own has just been lowered to a D rating. They are not sure what that means, but it does not sound good. Explain the credit rating..

  Find out what is the nominal yield to maturity first

A bond with a face value of $1,000 matures in 9 years and has a 7% semi annual coupon. The bond currently sells for $846. You would pay $846 for each bond if you think that a “fair” market interest rate (discount rate) for such bonds is ____.

  Business environment is done with a strategic purpose

Everything we do in a business environment is done with a strategic purpose. Your taking this course is to complete a degree program and better your opportunities for career advancement. At least for most of you. So moving forward, from a strategic s..

  Establish an endowment fund

You wish to establish an endowment fund that will provide student financial aid awards every quarter, perpetually. To finance the scholarships, you will make a series of equal deposits into a savings account. The deposits will be made quarterly equal..

  Write a 350- to 700-word rebuttal to the article using

locate an article about a controversial subject where the author makesnbspan argument you do not agree with.nbspwrite a

  What is its default risk premium

The real risk-free rate, r*, is 1.5%. Inflation is expected to average 3.25% a year for the next 4 years, after which time inflation is expected to average 4.9% a year. Assume that there is no maturity risk premium. An 8-year corporate bond has a yie..

  Company funds premiums on policies through bonuses

David owns 75 percent of the stock of Smith Industries, which is operated as an S corporation. Walter owns the remaining 25 percent. - David is the driving force behind the company. It is doubtful the company could survive without David. The company ..

  Receivables investment-what is the days sale outstanding

Snider Industries sells on terms of 3/10, net 30. Total sales for the year are $1,516,000. Thirty percent of the customers pay on the 10th day and take discounts; the other 70% pay, on average, 48 days after their purchases. Assume 365 days in year f..

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