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WITCHER [35]
2 years ago
7

Use the following information to answer the question: Stock’s Expected State of Probability of Return if this the Economy State

Occurring State Occurs Boom 0.25 25% Normal 0.50 15 Recession 0.25 5 The expected return is 15%. What is the standard deviation?
Business
1 answer:
shutvik [7]2 years ago
7 0

Answer:

The answer is 0.0707

Explanation:

Solution

Given that:

Probability Return  Probability(return-expected return)^2

0.25                  25                0.25(25-15)^2=25

0.5                     15                0.5(15-15)^2=0

0.25                    5                0.25(5-15)^2=25

Total = 25 +0 + 25

= 50

Thus

The next step is to find the standard deviation which is given below:

Standard deviation=[total probability (return-expected return)^2/total probability]^(1/2)

=(50)^(1/2)

=0.0707

Hence the standard deviation is 0.0707.

Note: The expected return is =15%

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Answer:

Price elasticity

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3 years ago
If the fair value of a debt investment that is classified as an available-for-sale investment declines for a reason that is view
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Answer: The investment is written down to fair value, and only the credit loss component of the impairment loss is recognized in net income.

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7 0
3 years ago
Pharmecology just paid an annual dividend of $2.00 per share. It’s a mature company, but future EPS and dividends are expected t
lesantik [10]

Answer:

a. Current Stock Price is $ 30.67

b. Current Stock price using forecasted real dividend and a real discount rate is $ 69.00

Explanation:

a. The question belongs to dividend discount model. It is used to calculate intrinsic price of the stock. This model assumes that price of stock or share is equal to net present value of its future dividends.

Price of Stock =  (Current year Dividend x ( 1+ growth rate)) / (nominal cost of capital - growth rate)

Current year Dividend = $ 2

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Growth rate = 3.50 % or 0.0350

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Price of Stock =(Dividend x ( 1 + growth rate)) / ( Real cost of Capital - Inflation rate)

Price of Stock = ($ 2 x ( 1 + 0.0350)) / (0.0650 - 0.0350)  

Price of Stock = $ 69          

   

7 0
3 years ago
Specific statements detailing what the organization intends to accomplish over a short period of time are call
kondor19780726 [428]

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3 0
2 years ago
edna kropp's gross income for a year included salary, $12,400; commission, $27,750; intrerest, $440. Her adjustment to income we
aliina [53]

Gross income is the total amount of income before any deductions.

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For adjusted gross income, you would subtract payment to retirement and withdrawal from the GROSS INCOME you calculated previously

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