How split between current yield and capital-gains yield, Macroeconomics

Assignment Help:

Suppose that a security costs $3,000 today and pays off some amount b in one year. Suppose that b is uncertain according to the following table of probabilities: b: $3,000 $3,300 $3,600 $3,900 $4,200 Probability: 0.1 0.2 0.3 0.2 0.2 a Calculate the return (in percent) for each value of b. (Note: You may just calculate the total return and not worry about how this is split between current yield and capital-gains yield.) b Calculate the expected return (in percent). c Calculate the standard deviation of the return. d Suppose that an investor has a choice between buying this security or purchasing a different security that also costs $3,000 today but pays off $3,300 with certainty in one year. How is an investor's choice of which secu- rity to purchase related to his degree of risk aversion?


Related Discussions:- How split between current yield and capital-gains yield

#.., what are the purposes of taxation

what are the purposes of taxation

Define the term- wages and income, Define the term- Wages and income R...

Define the term- Wages and income Remember that by wage we mainly mean what you receive for working one hour, whereas income is the total revenue from all sources over a longe

Medical goods or services, For which of the following medical goods or serv...

For which of the following medical goods or services is the income elasticity of demand largest? a. emergency services after a car accident b. measles shots c. physical ex

Elasticity of demand questions need to be done in graphs, To really underst...

To really understand it, compute the following price elasticities of demand: ·          The price of a laptop increases by 20% and there is a 40% drop in the quantity dem

Investment multiplier, what is the formula for calculating investment multi...

what is the formula for calculating investment multiplier for 4 sector economy?

What is independent monetary policy, What is independent monetary policy ...

What is independent monetary policy Advantages: First, in a freely-floating exchange rate, the exchange rate must move down or up to correct a payments imbalance. Second, monet

Statutory compliance mandates, To the extent that statutory compliance mand...

To the extent that statutory compliance mandates conditions that formerly were only available to workers who had union negotiating power to win such conditions at the bargaining ta

Find the nash equilibria, Two people are engaged in a joint project. If eac...

Two people are engaged in a joint project. If each person i puts in the effort x i , the outcome of the project is worth f ( x 1, x 2). Each person's effort level x i is a

Write Your Message!

Captcha
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