Question: An analyst has estimated how a particular stock's return will vary depending on what will happen to the economy: State of the Economy Probability of

An analyst has estimated how a particular stock's return will vary depending on what will happen to the economy: State of the Economy Probability of State Occurring Stock's Expected Return if this State Occurs Recession 0.1 -60% Below Average 0.2 -10% Average 0.4 15% Above Average 0.2 40% Boom 0.1 90% What is the standard deviation of the company's stock return? a. 2.472 b. 3.04% c. 37.08% d. 32.45% e. 44.24%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

2. (10 pt each) The following tables show the information on the returns of two stocks S, and S2 depending on the states of economy. State of Probability of Return on Return on economy States...

(30 points) Mr. Buckwater invested in the following four stocks whose price information is given as follows: Stock Number of shares Stock price ($) A 400 50 B 300 30 C 200 100 D 100 40 In addition,...

Below are the stock returns for the past five years for Agnew Industries: Year Stock Return 1 22% 2 33 3 1 4 -12 5 10 What was the stock's coefficient of variation during this five-year period? (Use...

An analyst has estimated how a particular stock's return will vary depending on what will happen to the economy: State of the Economy Probability of State Occurring Stock's Expected Return if this...

An analyst has estimated how a particular stock's return will vary depending on what will happen to the economy. What is the expected rate of return of the company's stock? OF THE ECONOMY Recession...

An analyst has estimated how a particular stocks return will vary depending on what will happen to the economy. What is the expected rate of return of the company's stock? OF THE ECONOMY PROBABILITY...

An analyst has estimated how a particular stock's return will vary depending on what will happen to the economy: State of Probability of Stock's Expected Return the Economy State Occurring if this...

An analyst has estimated how a particular stocks return will vary depending on what will happen to the economy. If a Recession economy occurs (.1 probability), expected return is -60%. If a Below...

Company sells $350,000 of 9%, 10-year bonds for 90.9777 on April 1, 2018. The market rate of interest on that day is 10.5%. Interest is paid each year on April 1. The issue price of the bond is...

Fizzy Cola acquires Juicee Ltd. for $25,000,000, and accounts for its investment as a statutory merger. Juicee's balance sheet at the date of acquisition is as follows The fair value of Juicee's...

a Convert the denary number, 112, into an 8-bit binary number. b i) Carry out a logical shift three places to the right on your answer to part a. ii) Convert the binary number in part bi) into...

On 1 March 2007 DB Limited issued R560 000 15% debentures at R98. The debentures were to be redeemed at par in four equal annual payments starting 28 February 2010. Required: Journalise the above...