Comprehensive Financial Management 14th edition

Ch. 6: Mini-Case (p. 284), Parts a, c, d, e, h, n, o, p, & q only

yes for p and q

Return on a 10-Year Zero Coupon Treasury Bond During the Next Year Worst Case Poor Case Most Likely Good Case Best Case Probability of Scenario 0.10 0.20 0.40 0.20 0.10 1.00 -14% -4% 16% 26% You have also gathered historical returns for the past 10 years for Blandy, Gourmang Corporation (a producer of gourmet specialty foods), and the stock market. Historical Stock Returns Market Blandy Gourmange 26% Year 30% 47% 2 15 -14 -22 15 7 -54 18 15 5 10 26 10 28 40 17 -23 6 -18 12 30 10 28 75 9.24% 38.6 Average return: Standard deviation: Correlation with the market: Betar 8.0% 20.1% 1.00 678 1.30