Question
Phoenix Company common stock is currently selling for $20 per share. Security analysts at Smith Blarney have assigned the following probability distribution to the price
Phoenix Company common stock is currently selling for $20 per share. Security analysts at Smith Blarney have assigned the following probability distribution to the price of (and rate of return on) Phoenix stock one year from now: Price Rate of Return Probability $16 20% 0.25 20 0% 0.30 24 +20% 0.25 28 +40% 0.20 Assuming that Phoenix is not expected to pay any dividends during the coming year and ignoring the price column determine the risk of possible rates of return on Phoenix stock (to the nearest tenth of a percent). Select one: a. c.. 2.25% b. a. 21,4% c. d. 45.6% d. b. 20.8
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