Answer:
0.2109 or 21.09%
Step-by-step explanation:
In order to maintain the same price after two days, the stock must go up (U) on two days and go down (D) on two days, the sample space for this event is:
S={UUDD, UDUD, UDDU, DDUU, DUDU, DUUD}
There are 6 equally likely possible outcomes. The probability that the price of the stock will be the same as it is today is:
The probability is 0.2109 or 21.09%.
Answer: Verizon is less expensive than the S&P 500 on both a P/E and dividend yield basis.
Step-by-step explanation:
When a <em>Price to Earnings ratio is relatively high</em> this means that the <em>Price of the security is high </em>because investors believe the company has good prospects.
When a Dividend Yield is relatively low, this means that the dividends being declared are quite lower than the price because Dividend yield is dividends as a percentage of security price. <em>Lower Dividend Yields therefore mean high security prices</em>.
Looking at the Verizon Chart and the S&P 500 you see that Verizon P/E ratio is 11.71 while S&P is 19.01.
This means that the price of Verizon's is less than S&P 500.
Also notice that Verizon's Dividend yield is 4.09% while S&P 500's is 1.91% again signifying that Verizon is cheaper.
I have attached the full question.
