homework week 4 Essay

15. Investment A has an expected return of $25 million and investment B has an expected return of $5 million. Market risk analysts believe the standard deviation of the return A is $10 million, and for B is $30 million (negative returns are possible here).

You recently purchased a stock that is expected to earn 12% in a booming economy, 8% in a normal economy and lose 5% in a recessionary economy. There is a 15% probability of a boom, a 75% chance of a normal economy, and a 10% chance of a recession. What is your expected rate of return on this stock?

The table below shows the equity betas for the firms presented in the case (using Jan-92 to Dec-96 equal weight NYSE/AMEX/NASDAQ as market portfolio):

C:4‑29 Current E&P Computation. Water Corporation reports $500,000 of taxable income for the current year. The following additional information is available:

1. The pressure announced on last night's television weather broadcast was 29.92. Explain how this was measured and give the units. Would this be considered an unusually large or low pressure value?

a. Calculate the expected return over the 4-year period for each of the three alternatives.

1. Describe two examples of important things that financial planning skills can help you do, and explain why these things are important to you personally. (4-6 sentences. 2.0 points)

2. Draw a flow diagram of the unit operations involved in sugar refining and at each step write a brief sentence explaining what is occurring.  Use the information from SKIL site to develop your flow chart.  Since the information does not start from the beginning of the refining process, please include an extraction step (extraction is explained in your textbook).  Either milling or diffusion is

Offer- This is defined as a clear manifestation of willingness to enter an agreement made by another person with full understanding that their assent to the bargain is an invitation and is concluded.

1) You can call the module several times instead of writing it out each time.

Read the following short essay, and then write a 3-5 page response (12-point font, double-spaced, normal margins, no cover page, no binders). Your response should do the following three things: (1) state what the main conclusion of the essay is; (2) state what the most important premises (including sub-conclusions) are—i.e., state which premises are most important if the argument is to rationally convince its audience; (3) evaluate the quality of the argument, giving detailed reasons to justify your evaluation. For purposes of evaluation, assume that the speaker is a contemporary Canadian philosopher and the audience is a group of students in Introduction to Philosophy.

In the parenthesis enter the cell number and letter to find total expenses per week. (i.e.) =sum(b5:b11)

a. What risk-free rate and risk premium did you use to calculate the cost of equity?

d. What would be the investor 's certainty equivalent return for the optimally chosen combination? 2. Consider an investor who has an asset allocation of 50% in equities and the rest in T-Bills. Suppose the expected rate of return on equities is 10%/year and the standard deviation of the return on equities is 15%/year. T-Bills earn 6%/year. a. What is the implied risk aversion coefficient of the investor?

We can’t figure out the riskiness of the stock by just looking at the expected return. In the case of individual stock, Reynolds at 1.87 is giving a higher return compared to Hasbro at 1.18. We wouldn’t know the riskiness unless we look at the standard deviation or the variance of the stock. By comparing the two, Reynolds has a higher variance and standard deviation and will be more risky.