The shares of XYZ, Inc. are expected to generate the following possible returns over the next 12 months:

Return                          Probability 

-5%                                  0.10 

5%                                   0.25 

10%                                 0.30 

15%                                 0.25 

5%                                   0.10

a. If the stock is currently trading at $50/share, what is the expected price in one year? Assume that the stock pays no dividends. 

b. What is the standard deviation of the returns on Misheak Inc.? 

c. ABC Inc. stocks have an expected price of $60, and a standard deviation of 15%. Is there a clearly dominant stock to invest in? Explain

Answer rating: 100% (QA)

Answer Return Probability 5 01 5 025 10 03 15 025 5 01 The expected return over the next ... View the full answer