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sweet-ann [11.9K]
4 years ago
13

You have been given this probability distribution for the holding period return for KMP Stock State of the Economy Boom Normal R

ecession
What is the expected holding period return for KMP stock?
Probability 30 .50 20 HPR 18% 12% 5%
a) 10.40%
b) 9.32%
c) 11.63%
d) 11.54%
e) 10.66%
f) 10.88%
Business
1 answer:
Hunter-Best [27]4 years ago
7 0

Answer: The answer is a

Explanation:

Using the formula

Expected Rate of Return = ∑(i =1 to n) Ri Pi

Where Ri = Return in scenario 1

Pi = Probability for the return in scenario 1

i = Number of scenario

n = Total number of probability and Return

P1=30

R1 = 18

P2 = 50

R2 =12

P3 = 20

R3 =-5

Expected Gain =(30 ×18) + (50 × 12) + ( 20 × -5)

= 540 + 600 + - 100

= 1,040

= 1,040 ÷ 100

= 10.4%

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Stolb23 [73]

Answer:Don's casualty loss deduction=$ 770

Explanation:

A  Casualty loss is an  unexpected or sudden financial loss that occurred as a result of  damage or loss of property. It will be calculated as follows

Adjusted basis at the time of accident         $1,500

Repair cost on account of accident              $2,750

Amount of casualty loss before  the adjustments $ 1,500

( which is the  Lessor of $ 1,500 and $ 2,750)

Deduct :

Reimbursements gotten from insurance         $ 730

Don's casualty loss deduction  = $ 1,500 - $ 730  = $ 770

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3 years ago
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Answer:

The correct answer is letter "A": functional.

Explanation:

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3 years ago
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3 years ago
Read 2 more answers
a. Long-term bonds have fewer risks than short-term bonds. b. Long-term bonds have more risks associated with them, and bring in
garri49 [273]

Complete Question:

What are the benefits of a long-term bond over a short-term bond?

Answer:

c. While long-term bonds have more risks associated with them, they have the potential to bring in higher returns for the initial investment.

Explanation:

A bond can be defined as a debt or fixed investment security, in which a bondholder (investor or creditor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time. The bond issuer are expected to return the principal (face value) at maturity with an agreed upon interest (coupon), which are paid at fixed intervals.

Bonds are generally debts, which may be floated in different ways with respect to the issuer of the bond and its type. Bonds are used by government and corporate institutions to borrow money with interest and they also have to pay for the face value of the bonds at maturity.

Bonds are classified into two (2) main categories and these are;

I. Long-term bonds: they usually spread over a long period of time and as such locking the money of an investor down while availing them a higher interest rate. Also, they are considered to be more riskier than shorter bonds.

II. Short-term bonds: this type of bond mature quickly and as such paying the investor's principal on time. It covers a period of one to five years maximum in duration.

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