Question
In: Finance
The stock of Business Adventures sells for $65 a share. Its likely dividend payout and end-of-year...
|
The stock of Business Adventures sells for $65 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 | $2.40 | $73 |
| Normal economy | 1.60 | 66 |
| Recession | .85 | 57 |
| 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 3%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) |
| Expected return | % |
| Standard deviation | % |
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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
.70
59
Calculate the standard deviation of the holding-period return.
All three scenarios are equally likely.
(Do not round intermediate calculations. Round your
answer to 4 decimal places)
Standard deviation?
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
Calculate the expected holding-period return. All three
scenarios are equally likely. (Do not round intermediate
calculations. Round your answer to 4 decimal places)
Expected return?
Use 0.01 Instead...
The stock of Business Adventures sells for $40 a share. Its likely dividend payout and end-of-year...
The stock of Business Adventures sells for $40 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
$52
Normal economy
1.40
44
Recession
.70
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.)
Expected return
%
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
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 $55 a share. Its likely dividend payout and end-of-year...
The stock of Business Adventures sells for $55 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
$2.10
$65
Normal economy
1.40
58
Recession
0.50
49
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 $80 a share. Its likely dividend payout and end-of-year...
The stock of Business Adventures sells for $80 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:
Stock Price
Dividend
Recession
$76
$0.75
Normal economy
82
2.50
Boom
87
3.00
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 3%.
The stock of Business Adventures sells for $50 a share. Its likely dividend payout and end-of-year...
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 $2.00 dividend $58 stock price),(normal economy $2
dividend and $54 stock price) (recession $0.50 dividend and $39.5
stock price)]
Calculate the expected holding period return and standard
deviation of the holding period return, the boom and normal economy
states are 40% likely to happen.
calculate the expected...
The stock of Business Adventures sells for $80 a share. Its likely dividend payout and end-of-year...
The stock of Business Adventures sells for $80 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: Stock Price Dividend
Recession $76 $0.75 Normal economy 82 2.50 Boom 87 3.00 Calculate
the expected holding-period return and standard deviation of the
holding-period return. All three scenarios are equally likely.
The stock of Business Adventures sells for $35 a share. Its likely dividend payout and end-of-year...
The stock of Business Adventures sells for $35 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
$1.20
$45
Normal economy
1.20
38
Recession
.60
26
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...
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