Problem 1 You are considering an investment in XYZ Co. using the following information. What is the
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Problem 1
You are considering an investment in XYZ Co. using the following information. What is the standard deviation ofXYZ's stock?
State of the Economy | Probability | Expected Return |
Recession | .15 | -5% |
Steady | .45 | 10% |
Boom | ? | 35% |
Problem 2
You are considering buying one of the following stocks:
Stock | A | C | E |
E(R) | 32.00% | 20.00% | 36.00% |
???? | 11.80% | 5.60% | 13.50% |
Which stock should you buy? Why?
Problem 3
Salah bought a stock for $55 per share and sold it for $65 after 18 months as well as he received $4.0 as cash divided during the period. Samir bought a bond for 9 months; his holding period return was 15%. Which investor makes higherrate of return?
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