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FINANCE! EXPECTED RETURNS!!! PLEASE SEE ATTACHMENT! 4 FINANCE QUESTIONS! PLEASE FOLLOW FORMAT GIVEN AND MIMIC IN ASSIGNMENT! https://www.youtube.com/watch?v=1LgLk-hIF6A 7.2. Expected returns: John is watching an
FINANCE! EXPECTED RETURNS!!! PLEASE SEE ATTACHMENT! 4 FINANCE QUESTIONS! PLEASE FOLLOW FORMAT GIVEN AND MIMIC IN ASSIGNMENT!
https://www.youtube.com/watch?v=1LgLk-hIF6A
7.2. Expected returns: John is watching an old game show rerun on television called Let's Ma which the contestant chooses a prize behind one of two curtains. Behind one of the curtain prize worth $150, and behind the other is a round-the world trip worth $7,200. The game sh placed a subliminal message on the curtain containing the gag prize, which makes the prob choosing the gag prize equal to 75 percent. What is the expected value of the selection, an standard deviation of that selection? television called Let's Make a Deal in Behind one of the curtains is a gag worth $7,200. The game show has rize, which makes the probability of d value of the selection, and what is the 7.3. Expected returns: You have chosen biology as your college major because you would like a medical doctor. However, you find that the probability of being accepted to medical schoo about 10 percent. If you are accepted to medical school, then your starting salary when you graduate will be $300,000 per year. However, if you are not accepted, then you would choo work in a zoo, where you will earn $40,000 per year. Without considering the additional educational years or the time value of money, what is your expected starting salary as well standard deviation of that starting salary? because you would like to be epted to medical school is starting salary when you d, then you would choose to ering the additional starting salary as well as the 7.5. Single asset portfolios: Stocks A, B, and C have expected returns of 15 percent, 15 pe percent, respectively, while their standard deviations are 45 percent, 30 percent, and 30 respectively. If you were considering the purchase of each of these stocks as the only ho portfolio and the risk-free rate is 0 percent, which stock should you choose? ed returns of 15 percent, 15 percent, and 12 5 percent, 30 percent, and 30 percent of these stocks as the only holding in your ould you choose? 7.12. The security market line: If the expected return on the market is 10 percent and the risk-free rate is 4 percent, what is the expected return for a stock with a beta equal to 1.5? What is the market risk premium for the set of circumstances describedStep by Step Solution
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