Question: Average expected return is 15% per year, and the standard deviation of returns is 10% annually. What is the rough probability that the stock gains

Average expected return is 15% per year, and the standard deviation of returns is 10% annually. What is the rough probability that the stock gains more than 50% next year?

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!

If a company's average expected return is 10% per year, and the standard deviation of returns is 15% annually. What is the rough probability that the stock gains more than 40% next year?

If a corporation average expected return is 10% per year, and the standard deviation of returns is 15% annually. What is the rough probability that the stock gains more than 40% next year?

If a companys average expected return is 10% per year, and the standard deviation of returns is 15% annually. What is the rough probability that the stock gains more than 40% next year? 1% 33% 5%...

A portfolio is composed of two stocks, A and B. Each stock has an expected return of 15%. For Stock A, the standard deviation of the rate of return is 20%. For Stock B, the standard deviation of the...

1. The risk-free rate is: A) another term for the dividend yield. B) defined as the increase in the value of a share of stock over time. C) the rate of return earned on an investment in a firm that...

CASE STUDY: Emaar Properties PJSC: Investment Risk Emaar Properties is a real estate development company located in the United Arab Emirates (UAE). It was founded and incorporated in 1997 by chairman...

1. Assume that Brady Corp. has an issue of 18-year $1,000 par value bonds that pay 7% interest, annually. Further assume that today's required rate of return on these bonds is 5%. How much would...

1. The capital asset pricing model a. provides a risk-return trade off in which risk is measured in terms of the market volatility b. provides a risk-return trade off in which risk is measured in...

12. The combination of securities in a portfolio is determined using the following guideline: _____ The investors primary objectives determine the asset allocation strategy; the investors secondary...

Elaine divorced in 2018 and received taxable alimony of $35,000 in 2020. In addition, she received $2,500 in earnings from a part-time job. What is the maximum IRA contribution that Elaine could have...

Let R be the partial order relation defined on A = (1,2, 3,4,5, 6,10, 12, 15, 20, 30,60}, where xRy means xly. a) Draw the Hasse diagram for R. b) Find all maximal and minimal elements. c) Find upper...

El patrimonio contable de las entidades con propsitos no lucrativos se clasifica de acuerdo con su grado de restriccin en Seleccione la respuesta correcta 1. Patrimonio restringido temporalmente 2....

1. The table below shows the demand and supply of coats in Cedarsville: a)What is the equilibrium price of coats? Will a shortage or surplus of coats occur at this price? b)At what price will the...

2. The economy of Macro Island is described by the following data: Labors share of income is one-third. Output grows by 8 percent per year. The capital stock grows by 9 percent per year. The labor...

1. In the steady state of the Solow model with technological progress, which of the following variables is not constant? a. capital per effective worker b. the capitaloutput ratio c. the real rental...

1. In the Solow model, an increase in the rate of population growth increases which of the following in the steady state? a. output per worker b. capital per worker c. consumption per worker d. the...