The question is incomplete. Here is the complete question:
The following annual returns for Stock E are projected over the next year for three possible states of the economy. What is the stock’s expected return and standard deviation of returns? E(R) = 8.5% ; σ = 22.70%; mean = $7.50; standard deviation = $2.50
State Prob E(R)
Boom 10% 40%
Normal 60% 20%
Recession
30% - 25%
Answer:
The expected return of the stock E(R) is 8.5%.
The standard deviation of the returns is 22.7%
Explanation:
<u>Expected return</u>
The expected return of the stock can be calculated by multiplying the stock's expected return E(R) in each state of economy by the probability of that state.
The expected return E(R) = (0.4 * 0.1) + (0.2 * 0.6) + (-0.25 * 0.3)
The expected return E(R) = 0.04 + 0.12 -0.075 = 0.085 or 8.5%
<u>Standard Deviation of returns</u>
The standard deviation is a measure of total risk. It measures the volatility of the stock's expected return. The standard deviation (SD) of a stock's return can be calculated by using the following formula:
SD = √(rA - E(R))² * (pA) + (rB - E(R))² * (pB) + ... + (rN - E(R))² * (pN)
Where,
- rA, rB to rN is the return under event A, B to N.
- pA, pB to pN is the probability of these events to occur
- E(R) is the expected return of the stock
Here, the events are the state of economy.
So, SD = √(0.4 - 0.085)² * (0.1) + (0.2 - 0.085)² * (0.6) + (-0.25 - 0.085)² * (0.3)
SD = 0.22699 or 22.699% rounded off to 22.70%
Answer:
B. French wines will become more expensive in the United States.
Explanation:
Exchange rate is the rate at which one currency can be exchanged for another during international trade. The strength of a currency determines how much of the other countrie's goods it can purchase.
When the strength of a countrie's currency is high it will purchase more of the other countrie's goods. If however the currency is weak, it will take more to buy the other countrie's goods.
In this case if the dollar falls against the euro, it will take more dollars to buy French wine than before.
For example if a bottle of French wine was $500, after the fall the price may now be $800.
Answer:
What was Organic Grocers' inventory turnover
ORGANIC
11,58 INVENTORY TURNOVER
Explanation:
The Organic company compared with the industry works with more inventory than the market, which means that the company is less efficient than the Grocery Industry in Inventory management .
ORGANIC
11,58 INVENTORY TURNOVER
11.680,000 Cost Of Goods
1.008,880 Average Inventory
32 DAYS IN INVENTORY
To calculate the Inventory Turnover ratio it's necessary to calculate the average inventory of the year ($1,008,880) , take the Total Cost of Goods ($11,680,000) and divide it by the Average Inventory, the result it's the Inventory Turnover of the company, in this case 11,58
To find the days in inventory we have to divide 365 (days of the year) by the Inventory Turnover, 11,58 the result is 32 days.
To have a similar Inventory Turnover as the industry the company needs to low the average inventory to $898,524.
ORGANIC
13,00 INVENTORY TURNOVER
11.680,000 Cost Of Goods
898,524 Average Inventory
28 DAYS IN INVENTORY
Luna-moon
Sol- sun
The difference of luna and sol would be that the moon (luna) comes out in the night and the sun (sol) comes out during the day
Hope this helps!!!!!!!
Answer:
Someone taking a course in Web design is affecting human capital.
