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In: Finance
The stock of XYZ sells for $75 a share. Its likely dividend payout and end-of-year price...
The stock of XYZ sells for $75 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:
| Dividend | Stock Price | |
| Boom | $2.50 | $83 |
| Normal economy | 1.30 | 77 |
| Recession | 0.75 | 65 |
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.)
b. Calculate the expected return and standard deviation of a portfolio invested half in XYZ stock and half in Treasury bills. The return on bills is 5%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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Normal economy
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Recession
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59
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All three scenarios are equally likely.
(Do not round intermediate calculations. Round your
answer to 4 decimal places)
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The stock of Business Adventures sells for $60 a share. Its likely dividend payout and end-of-year...
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likely dividend payout and end-of-year price depend on the state of
the economy by the end of the year as follows:
Dividend
Stock price
Boom
$2.00
$73
Normal economy
1.50
63
Recession
0.70
59
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scenarios are equally likely. (Do not round intermediate
calculations. Round your answer to 4 decimal places)
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Use 0.01 Instead...
The stock of Business Adventures sells for $40 a share. Its likely dividend payout and end-of-year...
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likely dividend payout and end-of-year price depend on the state of
the economy by the end of the year as follows:
Dividend
Stock Price
Boom
$2.00
$52
Normal economy
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Recession
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34
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.)
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%
Standard...
The stock of Business Adventures sells for $60 a share. Its likely dividend payout and end-of-year...
The stock of Business Adventures sells for $60 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: Dividend Stock Price
Boom $2.00 $70 Normal economy 1.80 63 Recession 0.90 54 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.) b. Calculate the expected...
The stock of Business Adventures sells for $60 a share. Its likely dividend payout and end-of-year...
The stock of Business Adventures sells for $60 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:
Dividend
Stock Price
Boom
$2.00
$73
Normal economy
1.50
63
Recession
0.70
59
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scenarios are equally likely. (Do not round intermediate
calculations. Round your answers to 2 decimal places.)
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Recession
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Stock Price
Dividend
Recession
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Normal economy
82
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Boom
87
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likely dividend payout and end-of-year price depend on the state of
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states are 40% likely to happen.
calculate the expected...
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