In a particular node on a decision tree, there's a 10% chance the firm will earn 5,000,
Question:
In a particular node on a decision tree, there's a 10% chance the firm will earn 5,000, there's a 60% chance the firm will earn 13,000, and there's a 30% chance the firm will earn 20,000.
a. Find the stock's expected value in one year.
b. Find the variance of the value of the stock in one year.
c. find the standard deviation of the value of the stock in one year.
d. find the Coefficient of Variable in one year
e. After calculation of a,b,c, and d, Please summarize that in a normal distribution, How much % chance that the expected value of ATCF can be in the range from? to?
(Example pattern form of answering in e.: In a normal distribution, there is a 68% chance that the expected value of ATCF can be in the range from 14,300-4,358=$9,942 to 14,300+4,358=$18,65)
Basic Finance An Introduction to Financial Institutions Investments and Management
ISBN: 978-1111820633
10th edition
Authors: Herbert B. Mayo