Required: 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.) Expects 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 5%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return Standard deviation % %

Required: 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.) Expects 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 5%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return Standard deviation % %

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 18MC

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The stock of Business Adventures sells for $30 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 Normal economy Recession Dividend $ 2.00 1.40 0.50 Required: 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 Answer is complete and correct. Stock Price $ 40 34 25 14.33 22.60 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 5%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) % % Answer is complete but not entirely correct. 8.75 11.30 % %
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: Boom Normal economy Recession Dividend $ 2.50 2.00 0.85 Stock Price $ 43 40 31 Required: 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 % %
A share of stock A is selling at K23.50. A summary of the uncertainty about next year’s holding period return with three possible scenarios: Business Conditions Scenario,s Probability, p End of Year Price High Growth 1 0.35 K35 Normal Growth 2 0.30 K27 No growth 3 0.35 K15 Annual dividends are K4.40, K4 and K4 under the different business conditions High, Normal and No growth, respectively. Required: (i). Calculate the annual holding period returns for each of the three scenarios and the expected HPR and the standard deviation of the HPR. (ii). A financial analyst forecasts the return on the LuSE All share index portfolio over the coming year will be 10 %. The one year T-bill rate is 5 %recent returns of the Index suggest a standard deviation of returns to be 18 %. (iii) What does this information suggest about the degree of risk aversion of the average investor assuming the average portfolio resembles the…
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: Boom Normal economy Recession Expected return Standard deviation Dividend $2.40 1.60 0.85 Required: 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 Stock Price $73 66 57 % % 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.) %
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: Dividend Stock Price Boom $ 3.00 $ 58 Normal economy 1.40 52 Recession 0.70 43 Required: 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 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.)
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 return and standard deviation of a portfolio invested half in business adventures and half is treasury bill. The return on bill is 5% Please answer fast i give you upvote.
4.StockA 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: Probability Stock Price Boom $50 Normal economy 42 Recession 30 50% 30% 20% Dividend $2.00 1.00 0.50 a.Calculate the expected holding-period return and standard deviation of the holding period return. b.Calculate the expected return and standard deviation of a portfolio invested half in this stock and half in Treasury bills. The return on bills is 4%.
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: Boom Normal economy Recession Expected return Standard deviation Dividend $2.00 1.00 0.50 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.) Stock Price $50 43 34 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 4%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) % %
3. The stock of Business Adventures sells for $100 per 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 Normal economy Recession Dividend $2.00 $1.00 $0.00 a. Calculate the expected holding period return and standard deviation of the holding-period return. Probability of Scenario 0.5 0.25 0.25 b. Stock Price $150 $115 $84 Calculate the expected return and standard deviation of a complete portfolio invested 60% in Business Adventures and 40% in Treasury bills. The return on the T-bill is 3%.
A share of stock of A-Star Inc. is now selling for $23.50. A financial analyst summarizes the uncertainty about the rate of return on the stock by specifying three possible scenarios: Business Condition End of Year Price Annual Dividend Scenario, s Probability, p(s) High growth Normal growth No growth 0.35 $35 $ 4.40 1 2 0.30 27 4.00 0.35 15 4.00 What are the holding-period returns for a one-year investment in the stock of A-Star Inc. for each of the three scenarios? Calculate the expected HPR and standard deviation of the HPR.
Find the annualized holding rate of return and the average rate of return for a stock that returned -30% in year 1 and +30% in year 2. Annualized holding rate of return = -7.00% A. -9.00% B. -15.00% C. 0.00%
If Do= $2.25, g (which is constant) = 3.5%, and Po= $44, what is the stock's expected dividend yield for the coming year? Select the correct answer. Oa. 4.15% b. 4.53% O c. 5.29% d. 4.91% O e. 5.67%