The stock of X Ltd. Performs well relative to other stocks during recessionary period. The stock...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The stock of X Ltd. Performs well relative to other stocks during recessionary period. The stock of Y Ltd., on the other hand, does well during growth periods. Both the stocks are currently selling for Rs.100 per share. You assess the rupee return (dividend plus price) of these stocks for the next year as follows. Economic Condition High growth Low growth Stagnation Probability 0.3 0.4 Return on X's stock 100 110 Return on Y's stock 150 130 Calculate the expected return and standard deviation of investing. A. Rs.1000 in the equity stock of X Ltd. [1 mark] B. Rs.1000 in the equity stock of Y Ltd. [1 mark] C. Rs.500 each in the equity stock of X Ltd. and Y Ltd. [3 Marks] 0.2 120 90 Recession 01 140 60 The stock of X Ltd. Performs well relative to other stocks during recessionary period. The stock of Y Ltd., on the other hand, does well during growth periods. Both the stocks are currently selling for Rs.100 per share. You assess the rupee return (dividend plus price) of these stocks for the next year as follows. Economic Condition High growth Low growth Stagnation Probability 0.3 0.4 Return on X's stock 100 110 Return on Y's stock 150 130 Calculate the expected return and standard deviation of investing. A. Rs.1000 in the equity stock of X Ltd. [1 mark] B. Rs.1000 in the equity stock of Y Ltd. [1 mark] C. Rs.500 each in the equity stock of X Ltd. and Y Ltd. [3 Marks] 0.2 120 90 Recession 01 140 60
Expert Answer:
Answer rating: 100% (QA)
Rs 1000 in the equity stock of x LTD ERx 03100 04120 011... View the full answer
Related Book For
Financial Accounting an introduction to concepts, methods and uses
ISBN: 978-0324789003
13th Edition
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
Posted Date:
Students also viewed these accounting questions
-
Reporting marketable securities available for sale at fair value on the balance sheet but not including the unrealized holding gains and losses in income is inconsistent and provides an opportunity...
-
How do you calculate the H+ in the following solution: [OH-] = 3.44 x 10-1 - need the steps please?
-
Consider a Markov chain (Xn)nzo with state space S = P a =(15 b a 1-b {0, 1} and transition matrix where 0 < a < 1,0 < b < 1, and define a new stochastic process (Zn)n>1 by Zn (Xn-1, Xn) for n 1....
-
For students in the United States, compare Medicaid coverage in your state with coverage afforded to recipients in a neighboring state. Are they the same? If not, why do you think that they differ?
-
Two different fuels can be used in a heat engine operating between the fuel burning temperature and a low temperature of 350 K. Fuel A burns at 2200 K delivering 30 000 kJ/kg and costs $1.50/kg. Fuel...
-
Quality Supplier, Inc., accepts cash or credit card payment from customers. During June, Quality provided $170,000 worth of supplies to customers who used Discover cards to pay for their purchases....
-
Zachary and Carrie Sexton (the Buyers) were searching for a home in the Kings wood neighborhood of Atlanta, Georgia. The Buyers real estate agent learned that Russell and Linda Sewell (the Sellers)...
-
At the end of 2014, Carpenter Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $54,000. On January 24, 2015, the company learns that its receivable from Megan Gray is...
-
Why would you perform a silent installation? What is the purpose of a password complexity policy? Oracle offers a free download of all editions of the Oracle Database. How does the company derive...
-
Create and insert an ERD showing the constellation ERD schema below. Please see requirements in the next two sections. Determine four to five (non-date/time) dimension tables a. SCDs need to be...
-
The following data were taken from the Balance Sheet columns of the work sheet for April 30, 2010 for Mackenzie Company: Accumulated Depreciation-Trucks $42,400 Prepaid Rent 6,800 Supplies 850...
-
According to Managing Change Control to Comply with FDA and EU Regulations article, In the manufacturing environment, change refers to any modification in: Answer:
-
Global Corruption Barometer - Nations Results: Mexica on Over the past two years how has the level of corruption in this country / territory changed?
-
1. Consider 21 bit VPN Ox 000D2B and page offset Ox 14C. Assuming a 2KB page size, 2 byte page table entries, and 14 bit PPNs, answer the following: (a) What is the capacity of the virtual memory?...
-
Derive the logic expressions to generate the signals PC_select and INC_select shown in Figure 5.20, taking into account the actions needed when executing the following in- structions: Branch: All...
-
How can I apply leverage points at my organization since I'm a manager at Mcdonald's? How can I apply chaos theory to my three opportunities are expanding it's menu to healthier food options,...
-
Develop a simple program using java that implements abstraction through the use of abstract class for the problem in performing a bank transaction. Constructor: Bank Account Transformers: void...
-
What do you think?
-
Analysis of financial statement disclosures related to marketable securities and quality of earnings. A commercial bank reports the following information relating to its marketable securities...
-
Revenue recognition Neiman Marcus, a U.S. retailer, uses the accrual basis of accounting and follows U.S. GAAR It recognizes revenue at the time it sells merchandise. Indicate the amount of revenue...
-
Income recognition for various types of business. Most business firms recognize revenues at the time of sale or delivery of goods and services and, following the principles of the accrual basis of...
-
Oxford Corporation began operations in 2015 and reported pretax financial income of 225,000 for the year. Oxfords tax depreciation exceeded its book depreciation by 40,000. Oxfords tax rate for 2015...
-
At December 31, 2015, Suffolk Corporation had an estimated warranty liability of 105,000 for accounting purposes and 0 for tax purposes. (The warranty costs are not deductible until paid.) The...
-
State whether each of the following events will result in a movement along General Motors (GMs) demand curve for labor in their U.S. automobile factories or whether it will cause its demand curve for...
Study smarter with the SolutionInn App