Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The current stock price for Beta Corporation is at $30 per share. Consider the following probability distribution of stock price and dividend for Beta Corporation:
The current stock price for Beta Corporation is at $30 per share. Consider the following probability distribution of stock price and dividend for Beta Corporation: Dividend Stock Price in One Year Probability $5 $35 25% $5 $28 50% $5 $20 25% a) Suppose you buy 100 shares of the stock in Beta Corporation, calculate the expected return rate for the investment. (7 marks) b) Calculate the standard deviation of the return rate for the stock in Beta Corporation. (9 marks) ci) Calculate the coefficient of variation for the stock in Beta Corporation. (5 marks) cii) Suppose the return rate for Alpha Limited is 3% and the standard deviation of the return rate for Alpha Limited is 2%. Compare the relative dispersion between the stock of Beta Corporation and the stock of Alpha Limited. (7 marks) The current stock price for Beta Corporation is at $30 per share. Consider the following probability distribution of stock price and dividend for Beta Corporation: Dividend Stock Price in One Year Probability $5 $35 25% $5 $28 50% $5 $20 25% a) Suppose you buy 100 shares of the stock in Beta Corporation, calculate the expected return rate for the investment. (7 marks) b) Calculate the standard deviation of the return rate for the stock in Beta Corporation. (9 marks) ci) Calculate the coefficient of variation for the stock in Beta Corporation. (5 marks) cii) Suppose the return rate for Alpha Limited is 3% and the standard deviation of the return rate for Alpha Limited is 2%. Compare the relative dispersion between the stock of Beta Corporation and the stock of Alpha Limited. (7 marks)
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