The stock of Business Adventures sells for $50 a share. Its likely dividend payout and end-of-year...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/664e181cb5555_012664e181c3c0ac.jpg)
Transcribed Image Text:
The stock of Business Adventures sells for $50 a share. Its likely dividend payout and end-of-year price depend on the state of the economy by the end of the year as follows: Boom Normal economy Recession Dividend $ 2.00 1.60 0.80 Stock Price $ 60 53 44 Required: a. Calculate the expected holding-period return and standard deviation of the holding-period return. All three scenarios are equally likely. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return Standard deviation % % b. Calculate the expected return and standard deviation of a portfolio invested half in Business Adventures and half in Treasury bills. The return on bills is 4%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return Standard deviation % % The stock of Business Adventures sells for $50 a share. Its likely dividend payout and end-of-year price depend on the state of the economy by the end of the year as follows: Boom Normal economy Recession Dividend $ 2.00 1.60 0.80 Stock Price $ 60 53 44 Required: a. Calculate the expected holding-period return and standard deviation of the holding-period return. All three scenarios are equally likely. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return Standard deviation % % b. Calculate the expected return and standard deviation of a portfolio invested half in Business Adventures and half in Treasury bills. The return on bills is 4%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return Standard deviation % %
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
Greety Food in Ashland, Kentucky, manufactures and markets snack foods. Sita Lee manages the company's fleet of 220 delivery trucks. Lee has been charged with *reengineering* the fleet-management...
-
The hypochlorite ion, ClO-, acts as a weak base. (a) Is ClO- a stronger or weaker base than hydroxylamine? (b) When ClO- acts as a base, which atom, Cl or O, acts as the proton acceptor? (c) Can you...
-
If the government taxes Internet service $15 a month, does the buyer or the seller pay more of the tax? What is the tax revenue? What is the excess burden of the tax? Is the tax proportional,...
-
Develop an approach to dealing with difficult people, including cynics. LO.1
-
(a) Determine the amount of work (in joules) that must be done on a 100-kg payload to elevate it to a height of 1 000 km above the Earths surface. (b) Determine the amount of additional work that is...
-
Amanda has an RRSP with $81,000. She needs to make a redemption from this RRSP in order to fund a family emergency and takes out $21,000. How much will the financial institution withhold? $2100 $3800...
-
Sarmax Manufacturing Sdn. Bhd. uses a joint production process that produces three products at the split-off point. Joint production costs during January were RM720,000. The company uses the net...
-
A pistoncylinder device contains 0.85 kg of refrigerant-134a at 210 oC. The piston that is free to move has a mass of 12 kg and a diameter of 25 cm. The local atmospheric pressure is 88 kPa. Now,...
-
3.3. Using the BEMT, show the effect of increasing linear twist on the variations in inflow, thrust, induced power, profile power, and lift coefficient across the span of a rotor with four blades of...
-
By uploading this work, I attest that the work contained herein is solely my own, that I only used the given equation sheet as a reference, and that I have not received any information from anyone...
-
Demand for patient surgery at Washington General Hospital has increased steadily in the past few years, as seen in the following table: ...
-
Explain product analysis
-
The cut off part at the bottom is (i.e., what good will each country export and what will it import?). Thanl you so much. 4. Suppose that the US and France produce only 2 goods: cloth and wine. The...
-
Open Text Corporation provides a suite of business information software products. Exhibit 10-9 contains Note 10 from the companys 2013 annual report detailing long-term debt. Required: a. Open Text...
-
Construct and interpret a 95% confidence interval for the true nutrition rating for all cereals with a sodium content of 100.
-
potential regression-related problems of which you should be aware
-
Perform the regression of ln pct (ln of percentage over 64) on ln popn, and obtain the regression diagnostics. Explain how taking the ln of percentage over 64 has tamed the residuals versus fitted...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App