Question

Compute the expected return given these three economic states, their likelihoods, and the potential returns: (Round your answer to 2 decimal places.)
 

Economic State Probability   Return    
Fast growth 0.20   30 %  
Slow growth 0.58   5    
Recession 0.22   –35    

 

Expected return:  ____.__%

Expert Answer

1 Rating

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Finance

Related Finance Q&A

Find answers to questions asked by students like you.

Q: Cconvertable bonds are: 1. Options attached to bonds that give the bond holder the right to purchase...

A: The appropriate option is (d).The bonds that allow the bondholders to convert the given number of bo...

Q: This is cash flow available for payments to stockholders and debt holders of a firm after the firm h...

A: The correct option is (b) free cash flow as after meeting all the necessary investments required to ...

Q: Part 1: The CFO of Cruz, inc. is considering Projects A and B which are considered equally risky; th...

A: As per Q&A guidelines, we should answer the first three subparts when multiple subparts given un...

Q: Scenario Probability Stock fund Rate of Return Bond fund Rate of Return Severe recession 0.05 -30 ...

A: Hence the stock fund mean return is 10.35%.The mean return of stock fundt is calculated by multiplyi...

Q: An investor owns $5,000 of Adobe Systems stock, $2,000 of Dow Chemical, and $9,000 of Office Depot. ...

A: Hence, the total weight of portfolio is $16,000 is obtained by adding the investment made by the inv...

Q: Assume ABC shares have a market capitalization of $50 million. The company is expected to pay a divi...

A: WACC refers to weighted average cost of capital. It is the rate that a firm needs to pay (on an aver...

Q: If you deposit money today in an account that pays 4%annually interest. How long will it take to dou...

A: Let's Say, one deposited $50,000 at 4% pa, you want it to become 1,00,000, one needs to follow the p...

Q: Washing machine cost $600.  You can buy on credit for 12 monthly payments of $52.74 each total cost ...

A: Answer:No, it was not considered as a best trade-off because, if you wait for one year the price of ...

Q: need help with all

A: Risk free rate, Rf = 4%CAPM = E(R) = Rf + Beta x (Rm - Rf) where Rm is the expected return from mark...

Q: You expect a share of stock to pay dividends of $1.30, $1.55, and $1.60 in each of the next 3 years....

A: Part A, B and C:Calculation of Stock Price, Dividend Yield in Year 1 and Dividend Yield at the start...

Q: 10 &ercent Suppose that you earned a bachelor's degree and now you' re teaching middle school. The s...

A: $1500 is deposited every three months for a period of 11 years at a rate of 5.5% compounded quarterl...

Q: Rank the following three stocks by their total risk level, highest to lowest. Night Ryder has an ave...

A: Calculation of the Total Risk Level of Night Ryder Stocks, WholeMart Stocks and Fruit Fly Stocks usi...

Q: Guthrie Enterprises needs someone to supply it with 142,000 cartons of machine screwsper year to sup...

A: a) To calculate the NPV of the project, first depreciation, after tax salvage value is determined an...

Q: XYZ company has the following expected cash flows for three scenarios that could occur:            ...

A: In an levered firm, there is no debt amount therefore no interest amount is payable that is 0. The E...

Q: Consider the following table, which gives a security analyst's expected return on two stocks for two...

A: For the Calculation of Alpha, first we have to calculate Beta of each stocks and Beta can be calcula...

Q: Tony Ring wants to attend Northeast College. He will need $66,000, 4 years from today. Assume Tony's...

A: Future Amount required (fv) = $66,000Interest Rate = 12%Type of Interest Compounded = SemiannuallyNu...

Q: You borrow $5000 at 10% per year and will pay off the loan in 3 equal annual payments starting one y...

A: Calculation of Payment at the end of Year 2:The interest payment is $348.94 and principal payment is...

Q: Alshon, Inc. has 6.00% coupon bonds that have 11 years left until maturity. The bonds make annual pa...

A: Compute the current bond price:The current bond price is $897.08.Excel spread sheet:The future value...

Q: Please show all equations and work as needed. Make the correct answer clear. If possible, please typ...

A: Note: Calculations are typed as requested for your convenienceThe company has issued 6 million share...

Q: You decide to discount a$5250, 345-day note at 3% to your bank at a discount rate of 4.5% on day 210...

A: Calculation of Proceeds:Assuming there are 360 days in a year.The proceeds are $5,309.80.Excel Sprea...

Q: Problem        “Suppose that your parents are willing to lend you $20,000 for part of the cost of yo...

A: To calculate rate on saving that would accumulate $ 20,000 in 60 months, if interest is compounded m...

Q: MMS Corp borrows $1,650,000 today for a new building. The loan is an equal principal payment loan wi...

A: Calculation of Current Portion of Debt in Month 16:The current portion of month debt 16 is $183,333....

Q: For Hero Honda company, country's largest two-wheeler maker Hero MotoCorp announced a joint venture ...

A: As per the capital budgeting criteria, investment is made in any project if the net present value of...

Q: Consider the following income statement for the Heir Jordan Corporation:    HEIR JORDAN CORPOR...

A: Income statement for Year 2, using the percentage of sales approach is prepared as below

Q: What are the TRIN Statistics and Cofidence Index and what do their values describe about the bullish...

A: The Trading Index is also known as Arms index. The name Arm’s index is decided on the name of the de...

Q: What is the future value of $875 deposited for one year earning an 8 percent interest rate annually?

A: Future value can be described as the future worth of a specific amount at a certain future date.It i...

Q: Optimal corporation wants to expand their manufacturing facilities. They have two choices, first to ...

A: It is given that firm must incur $290,000 for two years, if it chooses option 1. The second option i...

Q: Atlantic Corporation is the largest logging company in the north eastern part of the United States. ...

A: Dividend can be described as the amount received by shareholders from the company periodically.It is...

Q: As requested, I include full question. only need answer part d) https://www.bartleby.com/questions-a...

A: Hence, WACC before debt is 10%, and is determined by multiplying cost of equity capital with weight ...

Q: An investor purchased 500 shares of Electric Shaver Corporation stock at a price of $22.50 per share...

A: Calculate the total percentage return as follows:

Q: How much will I need to deposit into an account to have $6,500,000 in 10 years earning 5 % compounde...

A: Present value can be defined as the amount which is to be set aside in order to have a pre-defined s...

Q: Wildcat engineering decides to take a $10,000 interest only lona. The loan is to be paid montly over...

A: Interest only loan can be described as the loan on which borrower only pays the interest payments du...

Q: Need help with all

A: Click to see the answer

Q: 10 8rcert Suppose that you earned a bachelor's degree and now you're teaching middle school. The sch...

A: Note: No inermediate rounding is done, only answers are rounded to whole numbera) A deposit of $1500...

Q: Suppose you have good credit and can get a 30 year mortgage for $100,000 at 5%.  What is your monthl...

A: Amount of Mortgage (pv) = $100,000Time Period = 30 yearsNumber of Payments in a Period = 12Total Num...

Q: Question: Assuming the debt-equity ratio is 0.70, what is the value of the Microsoft? Which factors ...

A: Firm’s value represents the total value including market capitalization, debt (long-term and short-t...

Q: I f Topic 2: Linear Equations AT 9. A passbook savings account has a rate of 6%, Find the effective ...

A: Calculate the effective annual rate as follows:

Q: Your company is currently considering two investment projects. Each project requires an upfront expe...

A: 1.a)Computation of payback period for project A and project B:Hence, the payback period of project A...

Q: You own a furniture manufacturing company. You are looking to expand into glass furniture and need t...

A: Computation of ARR:Machine 2 can be purchased as it has the higher ARR of 32.73%.Excel spread sheet:

Q: Q3. Company ABC just sold their most profitable division for $100 million in cash. The company has a...

A: Hi, since there are multiple questions posted, we will answer the first question alone. Kindly repos...

Q: Using a MARR of 12%, find the external rate of return (ERR) for the following cash flow. Is this pro...

A: Calculation of ERR:ERR is 10.89%Present value of cash flow (outflow),

Q: A 4.40 percent coupon municipal bond has 16 years left to maturity and has a price quote of 105.50. ...

A: “Hi, as per our policy we will answer the first three parts of the question. Kindly repost the remai...

Q: The real risk-free rate (r*) is 2.8% and is expected to remain constant. Inflation is expected to be...

A: Computation of the yield:Hence, the yield is 8.58%.

Q: Scenario Probability Stock fund Rate of Return Bond fund Rate of Return Severe recession 0.05 -30 ...

A: Computation of variance and standard deviation of stock fund:

Q: MTH Q1 Question 1. A call butterfly with strikes (K1,K2,K3) is a portfolio consisting of long 1 K1 c...

A: A long butterfly spread with calls is a strategy of three-part call option trading where one call wi...

Q: Question: Calculate the average annual growth rate of Microsoft from the fiscal year ending 2009 unt...

A: Calculate the average annual growth rate as follows:

Q: The next dividend payment by Grenier, Inc., will be $1.72 per share. The dividends are anticipated t...

A: The interest rate that an investor expects from the investment made is known as required rate of ret...

Q: Babbalu Inc. just paid a dividend of $1 per share. Babbalu expects to increase its annual dividend b...

A: Given that the dividend just paid is $1.The dividend growth is expected to be 20% per year for next ...

Q: Dexter International is expected to pay a dividend next year of $2.10 per share. Dexter has a beta o...

A: Calculation of dividend yield:Answer:Dividend yield is 5.0%Meaning:Dividend yield is shown as a perc...

Q: You are the CFO of Carla Vista, Inc., a retailer of the exercise machine Slimbody6 and related acces...

A: Incremental cash flow at the beginning of the project = -( initial investment in the store + initial...