1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Fiesta28 [93]
3 years ago
5

Michelle is considering investing in a company's stock and is aware that the return on that investment is particularly sensitive

to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment Probability Return Boom 0.4 25.00% Good 0.3 15.00% Level 0.1 10.00% Slump 0.2 -5.00% Use the table of returns and probabilities above to determine the expected return on Michelle's investment? (Round answer to 3 decimal places, e.g. 0.076.) Expected return _______ Use the table of returns and probabilities above to determine the standard deviation of the return on Michelle's investment? (Round answer to 5 decimal places, e.g. 0.07680.) Standard deviation _________ Open Show Work Click if you would like to Show Work for this question:
Business
1 answer:
Cloud [144]3 years ago
4 0

Answer:

Expected return= 0.165

Standard deviation = 0.07762

Explanation:

Given the following :

State - - - - - - - probability - - return

Boom - - - - - - - 0.4 - - - - - - - - 25%

Good - - - - - - - - 0.3 - - - - - - - 15%

Level - - - - - - - - 0.1 - - - - - - - - 10%

Slump - - - - - - - -0.2 - - - - - - - -5%

Expected return on investment :

Probability × rate of return

(0.4 × 25%) + (0.3 × 15%) + (0.1 × 10%) + (0.2 × 5%)

(0.4 × 0.25) + (0.3 × 0.15) + (0.1 × 0.1) + (0.2 × 0.05) = 0.165

= 16.5%

Standard deviation = √variance

Variance = probability × (return - expected return)^2

Variance = 0.4(25-16.5)^2 + 0.3(15-16.5)^2 + 0.1(10-16.5)^2 + 0.2(5-16.5)^2

Variance = 0.4(8.5)^2 + 0.3(-1.5)^2 + 0.1(-6.5)^2 + 0.2(11.5)^2

Variance = 0.4(72.25) + 0.3(2.25) + 0.1(42.25) + 0.2(132.25)

Variance = 60.25%

Standard deviation = √60.25

Standard deviation = 7.7620873%

= 0.0776208

= 0.07762 ( 5 decimal places )

You might be interested in
What are the continuing costs of this apartment? Security Deposit $1,000 Application Fee $25 First Month’s Rent $850 Electricity
vekshin1
Answer= $1025 monthly (continuing costs)

Security Deposit $1,000
Application Fee $25
First Month’s Rent $850 $850
Electricity $80 per month; 80
$40 to connect and $100 deposit
Telephone approximately $60 per month; 60
$40 to connect Water $35 per month; 35
a deposit of $50. ____
$1025
6 0
3 years ago
What dose David works at a bakery b wall fox or c idk
MArishka [77]

Answer: a.bakery

Explanation:

7 0
3 years ago
Read 2 more answers
The purchase of treasury stock usually restricts the amount of retained earnings available for cash dividends.a. Trueb. False
DerKrebs [107]

The statement, "The purchase of treasury stock usually restricts the amount of retained earnings available for cash dividends." is true .

Option a

<u>Explanation: </u>

The stock in the bank is the term for originally sold securities that the issuing firm has retained. If a corporation sells some of its released and outstanding securities, the sale drastically alters its retained profits.  

As the balance sheet show all remaining earnings and the equity fund, sums available to pay dividends drop. The price of the stock in treasury should be reduced by the retained revenues, which reduce the amounts that the business can dividend to shareholders.

Sometimes a business needs the share-earnings ratio to be improved. If a company bought out many of its own shares, it reduces the number of released and outstanding activities raises the earnings per stake in the company and makes the assets more appealing for buyers.

6 0
3 years ago
When a government limits imports via tariffs and quotas and subsidizes exports in order to maximize exports and minimize imports
Jlenok [28]

Answer:

The correct answer is letter "A": A mercantilist philosophy.

Explanation:

The mercantilist philosophy is the economic approach whereby governments control their economies to reduce imports and maximize exports. It is believed that by taking such a measure, the wealth of the nation would increase as a result of the surplus in the balance of trade of the country. The trade balance is calculated by subtracting imports from exports.

3 0
3 years ago
Argue why a product launch that exceeded expectations may actually be a negative result.
STALIN [3.7K]
About 30 to 45% of new products fail to deliver any meaningful financial return. This typically happens due to a number of reasons, from poor product / market fit, failure to understand customer needs (or fixing a non-existing problem), to a lack of internal capabilities.
4 0
2 years ago
Other questions:
  • The company’s CEO repeatedly says that "employees are our most important resource," but many managers treat employees disrespect
    12·1 answer
  • A company wants to identify which of two production methods has the smaller completion time. One sample of workers is randomly s
    5·1 answer
  • Indirect interview request includes of all of the following techniques except
    6·1 answer
  • What are employers required to provide on all motor vehicles
    10·2 answers
  • Samson's purchased a lot four years ago at a cost of $398,000. At that time, the firm spent $289,000 to build a small retail out
    15·1 answer
  • Grace Owen formed a corporation with three of her friends for purposes of operating a catering company. Grace used her own check
    5·1 answer
  • The company employs a single employee who works all five weekdays and is paid on the following Monday. The employee works the en
    15·1 answer
  • Which factor of production is LEAST likely labeled in the photo?
    6·1 answer
  • Can I Plss get some help on this
    10·1 answer
  • It is most accurate to say that successful niche marketing relies on a firm's ________ and its ________.
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!