The price of stock you consider investing and the probabilities of occurrence are provided below: State...
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The price of stock you consider investing and the probabilities of occurrence are provided below: State Price Probability Growth 50 Stability 40 Recession 20 Crisis 10 30% 20% 20% 30% 1. Estimate the expected value, the variance and the standard deviation of the stock price. 2. Suppose that due to new information about the firm, your previous predictions are updated positively by adding $10 in each state. Calculate the new expected value, variance and the standard deviation of the stock price." 3. There is a secret plan for a big acquisition deal that can triple the stock price in each state. Calculate the expected value, variance and the standard deviation of the stock price under this scenario. The price of stock you consider investing and the probabilities of occurrence are provided below: State Price Probability Growth 50 Stability 40 Recession 20 Crisis 10 30% 20% 20% 30% 1. Estimate the expected value, the variance and the standard deviation of the stock price. 2. Suppose that due to new information about the firm, your previous predictions are updated positively by adding $10 in each state. Calculate the new expected value, variance and the standard deviation of the stock price." 3. There is a secret plan for a big acquisition deal that can triple the stock price in each state. Calculate the expected value, variance and the standard deviation of the stock price under this scenario.
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Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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