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The common stock of Mandarin, Inc., a restaurant chain, will generate the following payoffs to investors next year: Probability Dividend Stock Price Boom 0.35 $7
| The common stock of Mandarin, Inc., a restaurant chain, will generate the following payoffs to investors next year: |
| Probability | Dividend | Stock Price | |
| Boom | 0.35 | $7 | $200 |
| Normal economy | 0.45 | $5 | $127 |
| Recession | 0.2 | $1 | $7 |
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| The company goes out of business if a recession hits. Calculate the expected rate of return and standard deviation of return to Mandarin share-holders. The stock is selling today for $95. (Round your answers to 2 decimal places.) |
| Expected rate of return? % | |
| Standard deviation? % |
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Household Finance Adrift In A Sea Of Red Ink Palgrave Macmillan Studies In Banking And Financial Institutions
Authors: D. Chorafas
1st Edition
1137299444, 1137299452, 9781137299451
