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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Question
given below are likely returns in case of shares of sun ltd and moon ltd.in the various econmic conditions. both shares are presently quoted at rs.100 per share.
| econmic condition | probability | return of sun ltd % | return of moon ltd % |
| higher growth | 0.3 | 100 | 150 |
| low growth | 0.4 | 110 | 130 |
| stagnation | 0.2 | 120 | 90 |
| recession | 0.1 | 140 | 60 |
compute expected return and standard deviationfor both stocks and provide suggestionfor suitable investment.
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