Question 25 An analyst developed the following probability distribution of the rate of return for a common stock Scenario Probability Rate of return Recession 0 20 0 05 Normal 0 60 0 10 Boom 0 20 0 25 The standard deviation of the rate of return is closest to 1 0 0849 2 0 0949 3 0 0649 4 0 0745 5 0...

The Answer is in the image, click to view ...

Question 25 An analyst developed the following probability distribution of the rate of return for a common

Fantastic news! We've Found the answer you've been seeking!

Question:

Question 25

An analyst developed the following probability distribution of the rate of return for a common stock:
Scenario Probability Rate of return
Recession 0.20 -0.05
Normal 0.60 0.10
Boom 0.20 0.25

The standard deviation of the rate of return is closest to:

1. 0.0849
2. 0.0949
3. 0.0649
4. 0.0745
5. 0.0875

Posted Date: May 19, 2024 12:04 AM

See More Questions

Vito Co.'s next dividend is expected to be $4.50. Dividend growth is estimated at 20%, 15%, 8% for the following three years, and then stabilize to 2%. How much are you willing to pay to buy one...
Suppose that an electron trapped in a one-dimensional infinite well of width 250 pm is excited from its first excited state to its third excited state. (a) What energy must be transferred to the...
$b_{1}=27.45, d=-3.67$, find $b_{40}$. The first term and the constant difference of an arithmetic sequence is given. Using that information, determine the indicated term of the sequence.
Defective units that are not reworked The School Features Company makes briefcases, notebooks, and a number of other school and business related products. All products are produced for general stock...
Oya Paka and two business associates formed a corporation called Paka Corp. for the purpose of selling computer services. Oya, who owned 50 percent of the corporate shares, served as the corporations...
The following items were taken from the financial statement of p . pharoah Company. Prepare a classified balance sheet in good form in thousands
Independent inventors of the balance spring were (a) Fitch and Fulton (b) Hooke and Huygens (c) Verge and Foliot (d) Galileo and son
After considering the motion of the system as whole, let us now consider the mass that is attached to the oscillator. To do so, we must first recognize that we can describe position for simple...
Why does the financial expense/EBITDA ratio play such a fundamental role in scoring techniques? What are the accounting items corresponding to additions to wealth for shareholders, lenders and the...
Blanche Corporation estimated its unit costs of producing and selling 12,000 units per month as follows: Direct materials used- 32.00 Direct labor- 20.00 Variable manufacturing overhead- 15.00 Fixed...
Assume that Paradise Peach Hotel, a hotel chain, is planning to open its hotel in a new location. It is assumed that the project will produce net cash inflows of $1,000,000 at the end of each of the...
b) Compute the difference in the log value that optimist and pessimists attach to the bond, i.e. In Vo In Voss. In = VOpt. 0,T 0,T VPs). How does bond maturity affect the disagreement between...
Define supply chain effectiveness and supply chain efficiency (5 marks). Discuss one situation where a company should focus on supply chain efficiency and one situation where a company should focus...
Eleni Cabinet Company sold 2,200 cabinets during 2011 at $160 per cabinet. Its beginning inventory on January 1 was 130 cabinets at $56. Purchases made during the year were as follows: February . 225...
The U. S. dollar. The primary reason for using the dollar was that it provided a relatively stable benchmark, and it was accepted universally for transaction purposes.
Compare investments with different cash flows and residual values (Learning Objectives 2, 4) Java Cafe is considering two possible expansion plans. Plan A is to open eight cafes at a cost of...
Evaluate an investment using all four methods (Learning Objectives 2, 4) Zippi manufactures motorized scooters in Oakland, California. The company is con sidering an expansion. The plan calls for a...

Question 25 An analyst developed the following probability distribution of the rate of return for a common

Question:

Expert Answer:

Students also viewed these finance questions