Question: please explain the steps and how to get the answer. thank you Phoenix Company common stock is currently selling for $20 per share. Security analysts

please explain the steps and how to get the answer. thank you
Phoenix Company common stock is currently selling for $20 per share. Security analysts at Smith Blarney have assigned the following probability distribution to the price of (and rate of return on) Phoenix stock one year from now: 1. Price $16 20 Rate of Return -208 Probability 0.25 0.30 0.25 0.20 0% +20% +40% 28 Assuming that Phoenix is not expected to pay any dividends during the coming year, determine the expected rate of return on Phoenix Stock. a. 8% b.0% c. 10% d. 40% 2. Phoenix Company common stock is currently selling for $20 per share. Security analysts at Smith Blarney have assigned the following probability distribution to the price of (and rate of return on) Phoenix stock one year from now: Price $16 20 24 28 Rate of Return -20% +20% +40 Probability 0.25 0.30 0.25 0.20 Assuming that Phoenix is not expected to pay any dividends during the coming year, determine the standard deviation of possible rates of return on Phoenix stock (to the nearest tenth of a percent), a. b. c. d. 456% 20.9% 2.2% 21.4%
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
