ASAP PLEASE!!!

1. Use the following information, which describes the possible outcomes from investing in a particular asset, to answer the following two

Questions.

State of the Economy	Probability of the States	Percentage Returns
Economic recession	20%	-5%
Moderate economic growth	55%	5%
Strong economic growth	25%	13%

The standard deviation of returns is _______.

Multiple Choice

• 36 %

• 1.28 %

• 6 %

• 7.8 %

2. A bond has a face value of $1,000, a coupon of 6% paid annually, a maturity of 21 years, and a yield to maturity of 9%. (1) What is the bond price today and (2) what rate of return will be earned by an investor who purchases the bond today and holds it for 1 year if the bonds yield to maturity at the end of the year is 7%?

Multiple Choice

• $721.23 ; 32.28 %

• $894.06 ; 23.96 %

• $721.23 ; 23.96 %

• $894.06 ; 32.28 %

3. A stock is expected to pay a dividend of $12 one year from now. At the end of second year, the investor is expected to receive another dividend of $18. Investor plan to sell the stock at an expected price of $116 when she receives second dividend. The risk-free interest rate is $3 %, the expected market return is 12% and the stock has a beta of 0.7. What is the stock price today?

Multiple Choice

• $133.58

• $110.83

• $123.15

• $98.52