26. Ripken Iron Works believes the following probability distribution exists for its stock. What is the...
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26. Ripken Iron Works believes the following probability distribution exists for its stock. What is the coefficient of variation on the company's stock? State of the Economy Boom Normal Recession 2005 2006 2007 Probability of State Occurring 0.25 0.50 0.25 27. You are given the following returns on the Market and on Stock A. Calculate Stock A's beta coefficient. Year Stock A -15.00% 12.00% 40.00% Market -5.00% 11.00% 25.00% Stock's Expected Return 25% 15% 5% 28. Suppose you hold a diversified portfolio consisting of a $10,000 investment in a each of 12 different common stocks. The portfolio's beta is 1.25. Now suppose you decided to sell one of your stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.34. What would the portfolio's new beta be? 26. Ripken Iron Works believes the following probability distribution exists for its stock. What is the coefficient of variation on the company's stock? State of the Economy Boom Normal Recession 2005 2006 2007 Probability of State Occurring 0.25 0.50 0.25 27. You are given the following returns on the Market and on Stock A. Calculate Stock A's beta coefficient. Year Stock A -15.00% 12.00% 40.00% Market -5.00% 11.00% 25.00% Stock's Expected Return 25% 15% 5% 28. Suppose you hold a diversified portfolio consisting of a $10,000 investment in a each of 12 different common stocks. The portfolio's beta is 1.25. Now suppose you decided to sell one of your stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.34. What would the portfolio's new beta be?
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26 To calculate the coefficient of variation CV for Ripken Iron Works stock we need to find the standard deviation of the stocks returns and then divi... View the full answer
Related Book For
Intermediate Financial Management
ISBN: 978-1111530266
11th edition
Authors: Eugene F. Brigham, Phillip R. Daves
Posted Date:
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