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Please answer all questions asap Kogun Ltd has a current price of $10. It has not paid out any dividend since its IPO and will

Please answer all questions asapimage text in transcribedimage text in transcribed

Kogun Ltd has a current price of $10. It has not paid out any dividend since its IPO and will remain the same over the next decade. Its forecasted stock return over any 1-year period are given below: - an annual return of 25% with a probability of 40%. - an annual return of 10% with a probability of 60%. (a) Determine the expected 1-year return given the information above. (2 marks) There is an alternative way of calculating expected return. (b) Calculate the corresponding forecasted stock price a year from now under both scenarios and the expected stock price of Kogun Ltd at that time. (3 marks) (c) Following from part (b), calculate its expected 1-year return. (1 mark) Suppose that we would like to study the stock return of Kogun Ltd over a 2-year period starting from now given the information above. (d) You believe that the expected 2-year return is related to the expected 1-year return in some way. Express this relationship by your best guess and provide a brief justification. (2 marks) (e) Calculate the expected 2-year return. Note: you should not utilize your guess in part (d) regardless of its correctness. (4 marks) Kogun Ltd has a current price of $10. It has not paid out any dividend since its IPO and will remain the same over the next decade. Its forecasted stock return over any 1-year period are given below: - an annual return of 25% with a probability of 40%. - an annual return of 10% with a probability of 60%. (a) Determine the expected 1-year return given the information above. (2 marks) There is an alternative way of calculating expected return. (b) Calculate the corresponding forecasted stock price a year from now under both scenarios and the expected stock price of Kogun Ltd at that time. (3 marks) (c) Following from part (b), calculate its expected 1-year return. (1 mark) Suppose that we would like to study the stock return of Kogun Ltd over a 2-year period starting from now given the information above. (d) You believe that the expected 2-year return is related to the expected 1-year return in some way. Express this relationship by your best guess and provide a brief justification. (2 marks) (e) Calculate the expected 2-year return. Note: you should not utilize your guess in part (d) regardless of its correctness. (4 marks)

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