An analyst provided the following table about the returns of Walmart Inc in 2023: Scenario Probability Return Good Normal Bad Disaster 6.0% 7.5% 4.5% 0.15 0.60 1.0% 0.20 0.05 0.16 What is Walmart Inc's expected return? 0.09 -0.04 -0.20

An analyst provided the following table about the returns of Walmart Inc in 2023: Scenario Probability Return Good Normal Bad Disaster 6.0% 7.5% 4.5% 0.15 0.60 1.0% 0.20 0.05 0.16 What is Walmart Inc's expected return? 0.09 -0.04 -0.20

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Bak Assume that Richelle Corp imported goods from New York and needs 145,000 New York dollars 180 days from now. It is trying to determine whether to hedge its position. Richelle has developed the following probability distribution for the New York dollar Possible dollar value in 180 days HAE $.45 $0.40 $0.43 $0.51 $067 $0.81 $16.095 and 75% $4653 and 4.5% $3,789 and -89% Probability $3.356 and 35% 5% 10% 30% The 180-day forward rate of New York dollar is $0.63, and the spot rate is $0.59. Determine the expected additional cost of hedging. What is the probability that hedging will be more costly to the firm that not hedging? 30% 20% 5%
If the economy booms, RTF, Incorporated, stock is expected to return 10 percent. If the economy goes into a recessionary period, then RTF is expected to only return 3 percent. The probability of a boom is 65 percent while the probability of a recession is 35 percent. What is the variance of the returns on RTF, Incorporated, stock? Multiple Choice .001115 .033388 .000334 .037750 .000725
An analyst provided the following table about the returns of Seattle housing market in 2022: Scenario Probability Return Good Normal Bad 0.1 0.7 0.2 . What is the variance of return in 2022? What is the standard deviation? • What is the expected return of housing investments in Seattle in 2022? 0.25 0.10 6 -0.10
Finance Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Do not provide Excel Screet shot rather use tool table Answer completely.
What is the risk premium for the following returns if the risk-free rate is 4%? State Probability Return Boom .25 .25 Good .50 .10 Recession .25 0 a. 11.25% b. 7.25% c. 9.25% d. 8.25%
6) An investor holds a portfolio of stocks and is considering investing in the DBB Company. The firm's prospects look neutral, and you estimate the following probability distribution of possible returns: Conditions Recession P Returns on DBB Returns on DVI 0.12 -33% -12% Below Average 0.15 -18% 7% Average 0.46 12% 11% Above Average 0.15 25% 23% Boom 0.12 37% 25% a) How much is the expected return for DBB? b) How much is the coefficient of variation for DBB? c) Now let's say you want to add another asset, DVI, to your portfolio. You sell 35% of DBB to purchase DVI. How much is your expected return for this portfolio? d) How much is the coefficient of variation for the new portfolio?
Consider the following information: State of Economy Probability of State of Rate of Return if State Recession Normal Boom Economy .11 .35 .54 Calculate the expected return. Multiple Choice 20.82% 21.86% О 2.53% Occurs -.06 .12 .32
You own a portfolio with the following expected returns given the various states of the economy. What is the overall portfolio expected return? State of Economy Boom Normal Recession 0.0701 O 0.0648 0,0719 O 0.0548 Expected returns in various states of the economy Probability 0.0442 23.00% 70.00% 7.00% 13.00% 7.00% -10.00% Rate of Return
Using the following information, calculate the expected return and the standard deviation of Metlock. (Round intermediate calculations to 4 decimal places, e.g. 15.2564 and the final answers to 2 decimal places, e.g. 15.25%.) State of the Metlock stock economy Probability return (%) Depression 0.10 -4.9 Recession 0.15 1.0 Normal 0.40 5.9 Boom 0.35 17.9 Expected return Standard deviation % di do %
Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes that economic conditions will be "average." However, the CFO realizes that conditions could be better or worse, so she performed a scenario analysis and obtained these results: Economic Scenario Probability of Outcome NPV Recession 0.05 ($34 million) Below average 0.20 (16 million) Average 0.50 12 million Above average 0.20 16 million Boom 0.05 28 million Calculate the project's expected NPV, standard deviation, and coefficient of variation. Enter your answers for the project's expected NPV and standard deviation in millions. For example, an answer of $13,000,000 should be entered as 13. Do not round intermediate calculations. Round your answers to two decimal places. E(NPV): million σNPV: million CV:
A product manager prepared the following forecasts for a product line: 1 3 4 5 6 and later 2 + $2m $2m $3m $4m $4m g=2.5% If the appropriate discount rate is 8.5%, what is the present value of these future cash flows?
You are considering investing in a project with the following possible outcomes: Probability of Investment States Occurrence Returns State 1: Economic boom 18% 20% State 2: Economic growth 42% 16% State 3: Economic decline 30% 3% State 4: Depression 10% -25% Calculate the expected rate of return and standard deviation of returns for this investment, respectively. O 7.35%, 12.99% O2.18%, 1.69% O 8.72%, 12.99% O3.50%, 1.69%

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