Solve only 10.29 cates)10- For the data in Problem 10-5, assume that the optimistic probability is 20%, the most likely is 50%, and the pessimistic is 30%.(a) What is the expected value of the present worth?29(b) Compute the expected value for annual savings, and the corresponding present worth.(c) Do the answers to (a) and (b) match? Why or why not?10- Moore Science uses a discount rate of 15% to evaluate projects. Should the following project be undertaken if its life is 10 years and it has no5 salvage value?First Cost P Net Revenue P$200,000 0.1 $70,000 0.3300,000 0.6 80,000 0.6500,000 0.3 100,000 0.1Text Predictions: On$4TRAccessibility: Investigate▬▬▬▬%Ti¤6F6Y*F7&7PrtScnU8Home9EndOFocusPgUp2DE

Present value of annuity Annuity is a series of equal payments at equal interval. With periodic…

10- For the data in Problem 10-5, assume that the optimistic probability is 20%, the most likely is 50%, and the pessimistic is 30%. (a) What is the expected value of the present worth? 29 (b) Compute the expected value for annual savings, and the corresponding present worth. (c) Do the answers to (a) and (b) match? Why or why not?

10- For the data in Problem 10-5, assume that the optimistic probability is 20%, the most likely is 50%, and the pessimistic is 30%. (a) What is the expected value of the present worth? 29 (b) Compute the expected value for annual savings, and the corresponding present worth. (c) Do the answers to (a) and (b) match? Why or why not?

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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An asset has an average return of 11.51 percent and a standard deviation of 24.45 percent. What is the most you should expect to lose in any given year with a probability of 2.5 percent? Correct Answer is -37.39 %, just need to know how to get there. This is the correct answer from McGraw Hill Connect.
If the value of sustainable investing is $158.7 and the discount rate is 5.8% while the value of non-sustainable investing is $22.81 and the expected value of the company is $27.14. What is the assumed probability of being sustainable given a 5 year horizon? (Answer in percent to 2 decimals)
An asset has an average return of 11.33 percent and a standard deviation of 24.18 percent. What is the most you should expect to lose in any given year with a probability of 2.5 percent? −37.03% −61.21% −24.94% −12.85% −59.69%
An investment has a 20% chance of producing a 25% return, a 60%chance of producing a 10% return, and a 20% chance of producinga 215% return. What is its expected return? (8%) What is itsstandard deviation? (12.9%)
K2. If the 1% percentile of an annual return distribution is -2%, the risk free rate is 2% and the mean return is 4%, then A) The absolute 99% annual VaR is 2% B) The relative 99% annual VaR from the risk free rate is 4% C) The relative 99% annual VaR from the mean is 6% D) All of the above
Given an expected return of 8% and a standard deviation of 9%, we can predict that there is a _____ chance that future returns for this investment will fall between the range of -19% and 35%. Select one: a. 99.7% b. 95% c. 68% d. Unable to predict
An asset has an average return of 11.15 percent and a standard deviation of 23.91 percent. What is the most you should expect to earn in any given year with a probability of 2.5 percent? Multiple Choice 82.88% 70.93% 47.02% 35.06% 58.97%
Consider the following analysis of two alternatives, X & Y: YR X Y 0 -200 -1000 1 30 250 2 30 250 3 30 250 4 30 250 5 100 400 The MARR is 10%. Calculate the incremental rate of return in percent to the nearest 0.1 percent. Please explain each step
Under normal conditions (72% probability), Financing Plan A will produce a $21,000 higher return than Plan B. Under tight money conditions (28% probability), Plan A will produce $37,000 less than Plan B. What is the expected value of return?
You think there is a 60% chance that an investment will rise by 18% and a 40% chance it will fall by 27%. What is the expected return?
Q11. n is the number of periods of an investment, PV is the starting value, FVn is the future value n periods ahead, and ^ means 'to the power of'. What is the correct formula for calculating return? Group of answer choices 1. (FVn/PV)^n - 1 2. (FVn/PV)^n 3. (PV/FVn)^n - 1 4. 1 - (FVn/PV)^n
Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 5.2 percent and the standard deviation was 10.6 percent. a. What is the probability that your return on this asset will be less than –9.7 percent in a given year? Use the NORMDIST function in Excel® to answer this question. b. What range of returns would you expect to see 95 percent of the time? c. What range of returns would you expect to see 99 percent of the time?

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