13. Calculate the expected loss EL if k = $22,000, sigma = 0.7 and D =...

13. Calculate the expected loss EL if k = $22,000, sigma = 0.7 and D = 0.5.

14. A total of 10 units were tested over a 500-hour period. A total of 4 units failed after 10, 20, 70, and 400 hours. The other 6 did not fail during the 500-hour test. Calculate the failure rate.

15. The mean life of a diesel is 250,000 miles, with a standard deviation of 2,500 miles. What is the probability that it will wear out before 248,000 miles.

16. A component has a reliability of 0.99 for 600 hours of normal use. Determine the failure rate.

Expert Solution

orchestra answered 1 year ago

Stock Beta Expected returns A 1.1 10.50% B 0.8 7.80% C 0.7 7.10% D 1.3 12.20%...

Stock Beta Expected returns A 1.1 10.50% B 0.8 7.80% C 0.7 7.10% D 1.3 12.20% E 1.5 14.48% Assume that there are two securities which are not correctly priced. Which are they? Are they over-priced or under-priced? b. Given the following information for Company D, find the WACC. Assume the company’s tax rate is 25 percent. Debt: 5,600 (23) percent coupon bonds outstanding, $1,000 par value, 2 years to maturity, selling for 120 percent of par; the bonds make...

1. Consider two stocks, Stock D, with an expected return of 13 percent and a standard...

1. Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 26 percent, and Stock I, an international company, with an expected return of 16 percent and a standard deviation of 43 percent. The correlation between the two stocks is -0.5. What is the weight of stock D in the minimum variance portfolio? (Do not round intermediate calculations. Round your answers to 4 decimal places.) 2. Consider two stocks, Stock D, with an...

1. Consider two stocks, Stock D, with an expected return of 13 percent and a standard...

1. Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 33 percent, and Stock I, an international company, with an expected return of 16 percent and a standard deviation of 40 percent. The correlation between the two stocks is 0.2. What is the weight of stock D in the minimum variance portfolio? (Do not round intermediate calculations. Round your answers to 4 decimal places.) 2. Consider two stocks, Stock D, with an...

Question

13. Calculate the expected loss EL if k = $22,000, sigma = 0.7 and D =...

Solutions

Expert Solution

Related Solutions

Stock Beta Expected returns A 1.1 10.50% B 0.8 7.80% C 0.7 7.10% D 1.3 12.20%...

1. Consider two stocks, Stock D, with an expected return of 13 percent and a standard...

1. Consider two stocks, Stock D, with an expected return of 13 percent and a standard...