The following table shows expected data for Alfa Stock Company, use these data to calculate the expected rate of return, and the expected risk for this stock Scenario Probability Rate of Return Best case 0.2 25% Most likely 0.3 20% Worst case 0.5 -10%

Answer: (1): Scenario (2): Probability (3): Rate of Return Best case Most likely Worst case - The expected rate of return: E(R) = The expected risk =

Q6: Table below shows the amounts of money received in different periods; use the data inside to answer the following questions: Period T0 T1 T2 T3 T4 Discount Rate(i) Amount $ 100 $ 200 $ 150 $ 120 $ 100 10% 1) Calculate the accumulative amount of money (future Value FV) at the end of 4th period? 2) Calculate the present value (PV) for these amounts at T0?

Answer: 1) Future Value (FV) at the end of 4th period: Period Amount Number of Periods (n) Future Value for $1 Future Value Accumulative amount of money at the end of 4th period = 2) Present value (PV) of the amounts above: Period Amount Number of Periods (n) Present Value for $1 present Value Accumulative Present Value =