i will 5 upvotes urgent Let’s assume there is a mean annual return of 13.5% and a standard deviation of 22% for large company common stocks. In any one year, what is the probability of a portfolio invested solely in large-cap stocks returning more than 57.5% or less than -8.5%?
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i will 5 upvotes urgent
Let’s assume there is a mean annual return of 13.5% and a standard deviation of 22% for large company common stocks. In any one year, what is the probability of a portfolio invested solely in large-cap stocks returning more than 57.5% or less than -8.5%?
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- A stock is trading at $80 per share. The stock is expected to have a yearend dividend of $4 per share (D1 = $4), and it is expected to grow at some constant rate, g, throughout time. The stock’s required rate of return is 14% (assume the market is in equilibrium with the required return equal to the expected return). What is your forecast of gL?A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 7%. What is the stock's current price? Select the correct answer. a. $22.03 b. $21.43 c. $20.83 d. $20.23 e. $19.63The average returns on a portfolio of stocks are normally distributed. The average annual return is 8.25%, and the standard deviation is 4,5%. What is the probability that you lose more than 5.25% in a single year? O between 0.5% and 2.5% O less than 0.5% O 50% O higher than 1%
- Please check my work for accuracy A stock is expected to pay a dividend of $2.25 at the end of the year. Its beta is 1.4, the market risk premium is 5.50%, the risk-free rate is 4.00%, and the expected constant growth rate (g) is 8%. What is the stock's current price? 0.08 +1.4*0.055=0.157 2.25 / (0.157-0.05)=21.03Consider the rate of return of stocks ABC and XYZ. Year rABC rXYZ 1 22 % 34 % 2 12 12 3 14 18 4 7 0 5 1 −8 1. If you were equally likely to earn a return of 22%, 12%, 14%, 7%, or 1%, in each year (these are the five annual returns for stock ABC), what would be your expected rate of return? (Do not round intermediate calculations.) 2. What if the five possible outcomes were those of stock XYZ? 3. Given your answers to (d) and (e), which measure of average return, arithmetic or geometric, appears more useful for predicting future performance? A. Arithmetic B. Geometric1. A stock price is currently $50 and it follows geometric Brownian motion with an expected return of 10% and volatility of 25% per year. The probability that the stock price at the end of 9 months will be greater than or equal to $60 is closest to: a. 0.6037 b. 0.2245 c. 0.2730 d. 0.7755
- 6. Suppose that the simple annual returns on an investment over a 3-year period are: 8%, 2%, and 12%. What is the closest to the annualised holding period return? (a) 22.0% (b) 7.25% (c) 7.33% (d) 23.4% 7. A stock is currently trading at 20. Assume that at the end of one month it will either be 23 or 17. The risk-free interest rate is 5% per annum. The value of an ATM put option with a maturity of 1 month is closest to (a) 0.55 (b) 0.95 (c) 1.45 (d) 3.00A stock is expected to pay a dividend of $1.25 at the end of the year. The required rate of return is 10.00%, and the expected constant growth rate is g = 5.50%. What is the stock's current price? (Ch. 9) Group of answer choices 22.73 8.06 25.00 27.78 12.50Given the following information, what is the expected return on a portfolio that is invested 30 percent in both Stocks A and C, and 40 percent in Stock B? Rate of Return if State Occurs: Stock B (%) 13.2 9.6 1.2 State of Probability of Economy State Occurring Stock A (%) 15.6 11.2 2.5 Boom Normal Recession .08 .87 .05 Stock C (%) 12.9 8 -5.6
- What return do you expect on a portfolio next year that is currently invested 20% in your stock (with an expected return as computed in c.1) and 80% in an equity mutual fund (which is an investment company that invests into stocks for investors) that has a CAPM expected return of 5.82%? Return in c1= 9.34%a) Consider these three stock returns with the following annualised characteristics: Stock A Stock B Stock C Expected Return 16% 10% 3% Stock A Stock B Stock C Standard deviation 26% 22% 11% Stock A 1 0.4 0.2 According to the Capital Asset Pricing Model (CAPM), which stock is a better buy, when the market's expected return is 8%, and risk-free rate is 4%? What is the alpha of each stock? Plot the Security Market Line (SML) and each stock's risk-return point on one graph. b) Now suppose that the same stock returns have the following correlation matrix: Beta Stock B 1.5 1.1 0.3 1 0.3 Stock C 1 Weights 55% 35% 10% If we form a three-stock portfolio by investing 55%, 35% and 10% in Stock A, B and C, respectively, what is the expected return and variance of this portfolio?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%
