Question
You expect the following set of possible outcomes for a stock: Outcome Probability Ending Stock Price Holding Period Return (Percent) Risk-free rate (Percent) Good 35%
You expect the following set of possible outcomes for a stock:
| Outcome | Probability | Ending Stock Price | Holding Period Return (Percent) | Risk-free rate (Percent) |
| Good | 35% | $120 | 44.5 | 4 |
| Neutral | 30% | $100 | 14 | 2 |
| Bad | 35% | $70 | -16.5 | .5 |
What is the variance of its ending price? Please enter your answer rounded to the third decimal place.
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Cost Of Capital Applications And Examples
Authors: Shannon P. Pratt, Roger J. Grabowski, Richard A. Brealey
5th Edition
1118555805, 9781118555804
