Based on the scenario analysis on stocks and bonds, we know the following:
- Treasury bonds will provide a higher return in a recession than in a boom.
- The expected return of Bonds is 9.8% and that of stocks is 11.6%.
- The standard deviation of Bonds is 9.24% and that of stock is 11.76%.
<h3>What does the scenario analysis on Bonds and Stocks show?</h3>
In a recession, Bond returns will be 15%. This is much higher than Bond returns in a boom of only 5%.
The expected return on bonds will be:
= ∑(Probability of Scenario x Returns in scenario)
= (0.30 x 15%) + (0.60 x 8%) + (0.10 x 5%)
= 9.8%
The expected return on stocks will be:
= (0.30 x -6%) + (0.60 x 18%) + (0.10 x 26%)
= 11.6%
Using a spreadsheet, you can input the expected returns of the stocks and the bonds to find the standard deviation to be 9.24% and 11.76%, respectively.
Find out more on stock expected returns at brainly.com/question/18724022.
#SPJ1
Estimates of a stock's intrinsic value calculated with the free cash flow methodology depend most critically on the terminal value used.
What is intrinsic value of stock?
A thing, asset, or financial contract can have intrinsic value if it has some basic, objective value. It may be a good buy or a good sale if the market price is less than that value. There are various approaches for determining a reasonable appraisal of a share's intrinsic value when reviewing equities.
What does terminal value mean?
The worth of a firm, project, or asset after the period for which future cash flows can be predicted is known as its terminal value (TV). After the projected period, terminal value assumes a company will continue to expand at a specific pace indefinitely.
Learn more about intrinsic value: brainly.com/question/14582100
#SPJ4
Answer: Sheldon focuses or specialize on running errands and Leonard in washing dishes;
they trade at 1 errand run per 20 dishes washed
Explanation:
Sheldon focuses or specialize on running errands and Leonard in washing dishes; thus this the individual specialization
they trade at 1 errand run per 20 dishes washed this is the terms of trade they both can agree on.
Answer:
the law of comparative advantage
Explanation:
Answer:
unenforceable;
preexisting duty
Explanation:
Preexisting Duty Doctrine
This is simply regarded as when an individual is already under an obligation to do something. It simply states that the rules and guidelines under contract law that shows that if a party to a contract is under a pre-existing duty to perform, then no second thought (consideration) is taken for the modification of the contract. Modification is then voidable.
3 Types of Legal Duties
1. Public Legal Duties such ad the duty of a police officer to protect lives and properties.
2. Contractual Legal Duties such as unperformed, preexisting contractual promises etc.
3. Private Legal Duties such as the duty to follow the law.
Unenforceable Contracts
This is regarded as a contract that cannot be enforced/given consideration or effect by the court of law etc unless they are settled and corrected according to law.
Kinds of unenforceable contracts
1.) Those entered into in the name of another by one without, or acting in excess of rights or authority;
2.) Those that do not comply with the Statute of Frauds etc.
