Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 1 a. Calculate the expected return on stock of Gamma Inc.: State of the economy Probability of the states Percentage returns Economic recession 28%
Question 1
a.
Calculate the expected return on stock of Gamma Inc.:
| State of the economy | Probability of the states | Percentage returns |
|---|---|---|
| Economic recession | 28% | -7.4% |
| Steady economic growth | 35% | 2.2% |
| Boom | Please calculate it | 14.6% |
Round the answers to two decimal places in percentage form.
b.
Calculate the expected standard deviation on stock:
| State of the economy | Probability of the states | Percentage returns | |
|---|---|---|---|
| Economic recession | 18% | 2% | |
| Steady economic growth | 22% | 8% | |
| Boom | Please calculate it | 14% |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Public Finance Fundamentals
Authors: K. Moeti
3rd Edition
148512946X, 9781485129462
