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(1) he cen mweut in a fisk free savings account with a guaranteed as annual rate of return; (2) he can invest in a fairly

image text in transcribed (1) he cen mweut in a fisk free savings account with a guaranteed as annual rate of return; (2) he can invest in a fairly wafe stost where the pockitule annual rates of return (or dividends) are 6%,8%, or 10%. The conditional probabilities for whis stocking ovticu 2 is given on the following event tree branches. The investor can sell the stock at the price he kought if ahey two wear, but he collects the dividends for the first vear, and then again at the end of the second few along with selling eut to get back (recoup) the $10,000 initial investment. 43. What is the assumed MARR in this situation? a. 398 b. 6% c. 8% d. 10% 44. What is the earnings for vear 2 if the stock gave 8% return in year 1 and then a 10% return for year 2 ? a. 1,080 b. 1,000 c. 660 d. 880 45. Determine the lowest possible random NPV amount. a. 562.56 b. 551.08 c. 574.04 d. 768.22 46. What is the joint probability of the highest possible return? a. 0.60 b. 0.06 c. 0.03 d. 0.01 47. Determine the expected NPV for the stocking option (2). a. 762.30 b. 784.25 c. 837.62 d. 926.01 the complete probability distribution table for the random NPV values and their corresponding probabilities in pace below: send of extum (1) he cen mweut in a fisk free savings account with a guaranteed as annual rate of return; (2) he can invest in a fairly wafe stost where the pockitule annual rates of return (or dividends) are 6%,8%, or 10%. The conditional probabilities for whis stocking ovticu 2 is given on the following event tree branches. The investor can sell the stock at the price he kought if ahey two wear, but he collects the dividends for the first vear, and then again at the end of the second few along with selling eut to get back (recoup) the $10,000 initial investment. 43. What is the assumed MARR in this situation? a. 398 b. 6% c. 8% d. 10% 44. What is the earnings for vear 2 if the stock gave 8% return in year 1 and then a 10% return for year 2 ? a. 1,080 b. 1,000 c. 660 d. 880 45. Determine the lowest possible random NPV amount. a. 562.56 b. 551.08 c. 574.04 d. 768.22 46. What is the joint probability of the highest possible return? a. 0.60 b. 0.06 c. 0.03 d. 0.01 47. Determine the expected NPV for the stocking option (2). a. 762.30 b. 784.25 c. 837.62 d. 926.01 the complete probability distribution table for the random NPV values and their corresponding probabilities in pace below: send of extum

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