State of the Economy High Growth Normal Growth Recession Probability Return 0.2 +30% 0.7 +12% 0.1 -15% Compute the expected value of a $1,000 investment over the coming year. If you invest $1,000 today, how much money do you xpect to have next year? What is the percentage expected rate of return? structions: Enter dollar values rounded to the nearest whole dollar and percentages rounded to one decimal place. The expected value is $ 1129 and the expected rate of return is 12.9 %. . Compute the standard deviation of the percentage return over the coming year. tandard deviation = 11.7 % If the risk-free return is 7 percent, what is the risk premium for a stock market investment? isk premium = | 17.5 %

State of the Economy High Growth Normal Growth Recession Probability Return 0.2 +30% 0.7 +12% 0.1 -15% Compute the expected value of a $1,000 investment over the coming year. If you invest $1,000 today, how much money do you xpect to have next year? What is the percentage expected rate of return? structions: Enter dollar values rounded to the nearest whole dollar and percentages rounded to one decimal place. The expected value is $ 1129 and the expected rate of return is 12.9 %. . Compute the standard deviation of the percentage return over the coming year. tandard deviation = 11.7 % If the risk-free return is 7 percent, what is the risk premium for a stock market investment? isk premium = | 17.5 %

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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