k W has the following returns for various states of the economy: State of the Economy Probability Stock W's Return Recession 0.15 -10% Below Average 0.20 5% Average 0.30 8% Above Average 0.25 12% Boom 0.10 18% Stock W's standard coefficient of variance (CV) is
Q: 1. Develop a revenue plan that will allow VGU to pay the interest and principal of the bonds. (How…
A: Bond valuation refers to a method which is used to compute the current value or present value (PV)…
Q: You deposit $300 each month into an account earning 8% interest compounded monthly. a) How much will…
A: a) Money in account in 30 years: Solved using Financial Calculator PMT = -300 N = 12 * 30 = 360 I/Y…
Q: note from certain bank. The company will continue to collect the assigned receivable. In addition to…
A: Factoring is a transfer of funds where a firm passes its debts to a financing company.This factor…
Q: An investor who owns a interest rate swap pay six-month LIBOR and receive 2.38% (semi-annual…
A: Here, Notional Principal is 99 million Euro Receive six month LIBOR of 2.38% with semi annual…
Q: Use a bankers year: 360 T-bills (Treasury bills) are one of the instruments the U.S. Treasury…
A: Maturity Value is $17,750 Purchase price is $17,564.46 Time to maturity is 200 days Number of days…
Q: XYZ Company plans to invest $1 million in a new plant which is expected to produce a uniform annual…
A: Net Present Value: It is the difference between the current worth of money inflows and outflows…
Q: A manufacturing machine has a first cost of $50 thousand with a $22 thousand salvage value after 11…
A: Book value after N years under declining Balance method can be calculated as: = Book value at…
Q: Directions: Read the following annuity problem. Fill in the blanks in the statements th follow. A…
A: The loans are paid by equal monthly payments these monthly payment carry the payment for the…
Q: Payback Period and NPV of Alternative Automobile Purchase Wendy Li decided to purchase a new Honda…
A: Payback Period: It is a measure of time expected to recover the expense of an underlying venture.…
Q: Need for External Financing To increase production capacity by 20%, an $8 million investment is…
A: To meet the financial requirement of business, companies raise the funds from different sources.…
Q: f you have an opportunity to earn a guaranteed return of 6%, what is the most you would pay for…
A: The value of the annuity is the present value of the future value of payments. This can be found…
Q: On February 14, 2014, Rogine borrowed Php60,250 at 7% compounded semiannually. How much does he…
A: Solution:- When an amount is borrowed, it has to be repaid along with interest. The amount borrowed…
Q: How important is corporate governance when it comes to investing in a firm?
A: “Since you have asked multiple questions, we will solve the one question for you. If you want any…
Q: Directions: Match the terms in Column A with the correct definition in Column B. You may choose more…
A: Investment is sacrifice of present worth of money in order to gain return in future.
Q: Knowledge Check 01 The net cash flows from operating activities are the net income reported in the…
A: Cash flow from operating activities are cash inflows and cash outflows relating to day to operation…
Q: Find the rate of return (IRR) on a project that will cost $200,000 today and $400,000 in 4 years…
A: Concept . Internal rate of return is method of calculating investment's rate of return.
Q: Principal Rate Time Interest Maturity Value PHP 60,000 4% 3.5 уrs 2.2% 5 yrs PHP 345 PHP 125,000 2%…
A: The formula for simple interest is: Simple interest=Principal×time×rate100…
Q: Integrative-Risk and Valuation Hamlin Steel Company wishes to determine the value of Craft Foundry,…
A: Here, Dividend in 2017 is $2.65 Dividend in 2022 is $3.38 Expected Dividend next years is $3.55 Risk…
Q: Compute the arithmetic mean of the following numbers. (Round your answer to two decimal places.)…
A: Given: Numbers: 84, 44, 56, 73, 42, 16, 26, 51
Q: You may use your financial calculator or excel for calculations but be sure to show your work (i.e.…
A: Part 1: Future Value = $400,000 Rate = 2% Time period = 18 months - 12 months = 6 months Present…
Q: If you were given a chance to invest your money what is your preference Simple or compound interest?…
A: Solution:- In simple interest, the interest is calculated on the principal amount. While on the…
Q: A salesman got P10,000 commission on sale of a certain item. This amount raised his average…
A: Commission is an additional reward given to an employee for achieving a certain target. It is a form…
Q: How long will it take to pay off a loan of $47,000 at an annual rate of 8 percent compounded…
A: Solved using Financial Calculator PV = 47,000 PMT = 650 I/Y = 8/12 = 0.6666666667 CPT N = 99.0104…
Q: The cost of having financial statements audited by an independent accounting firm.
A: Cost refers to the monetary value which includes the expenditure for supplies, services,…
Q: 3- The risk that an obligator may fail to meet the terms of any contract with the bank is Credit…
A: Credit, operational, market, and liquidity risks are major concerns for institutions. Institutions…
Q: A company has cost estimates associated with operating and maintaining the currently owned filter…
A: Given, In this question we have to determine the cost of retention and the annual worth of the…
Q: why is it important for finance student to understand credit and collection management and its steps…
A: Financial management is a study and methods to manage the inflow and outflow of funds of a company.…
Q: 8. Find the net present value of the cash flows shown below. +200 %5 %8 %10 %12 Semiannually Monthly…
A: Here, Cash Flow in Year 1 is $200 Cash Flow in Year 2 is $60 Cash Flow in Year 3 is -$100 Cash Flow…
Q: Does a firm's social presence need to be considered before an individual decides to invest? Why, or…
A: Investment means engaging your funds to generate income for the future. Before investing, various…
Q: Profitability ratios describe – A. Organization's profit В. Organization's debt C. Organization's…
A: As per Bartleby guidelines, If multiple questions are posted , only first 1 question will be…
Q: Keys Corporation's 5-year bonds yield 5.10% and 5-year T-bonds yield 4.40%. The real risk-free rate…
A: The DRP (Default Risk Premium) is a payment made to financial lenders or investors in the event that…
Q: Salem Ltd. Is considering the purchase of a new machine that has a purchase price of $1,200,000.…
A:
Q: For terms of 6/10, n/30, what annual rate do you pay the supplier if you fail to pay the invoice at…
A: The terms mean that if payment is made within 10 days a discount of 6% will be provided. Otherwise…
Q: iquidation based valuation Tang mining is considering the acquisition of Zang Mining at a cash…
A: Net value of the assets is the remaining value left after all liabilities.
Q: You own a coal mining company and are considering opening a new mine. The mine will cost $115.9…
A: Given Cost of project is $115.9 million Cashflows $20.1 million Cost of capital is 8.2%
Q: If a person deposits $10,000 at 10% per year simple interest, what compound interest rate would…
A: Compound interest (also known as compounding interest) is the interest on a loan or deposit that is…
Q: A metal manufacturing company is going public by offering their shares at $79 with $3 as annual…
A: Current Stock price is $79 Annual Dividend is $3 Growth rate is 2.4% Expected return of the investor…
Q: Robinson Co. is interested in purchasing a new delivery vehicle so it can become a subcontractor…
A: Net Present Value: It is applied to series of cash flows happening at various times and represent…
Q: When compounded quarterly P12,000 becomes P 20,415.23 after 4 yrs. What is the nominal rate of…
A: Present value (PV) = P12000 Future value (FV) = P20,415.23 Period (t) = 4 Year Number of compounding…
Q: Morgan is a financial advisor and he just received $10,000 from a client. Based on the client's risk…
A:
Q: 13. Determine the median of the following set of values. Round to the nearest tenth when applicable.…
A: In a sorted list of numbers, the median is the number in the middle. Sort the numbers in value order…
Q: 5. The payments made in a sinking fund are $5, 000 at the end of each quarter for 3 years. Assume…
A: Quarterly deposit amount = $5,000 Annual interest rate = 0.10 Quarterly interest rate = 0.025 (i.e.…
Q: What is a lower bound for the price of a nine-month European put option on a non-dividendpaying…
A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…
Q: Toombs Media Corp. recently completed a 3-for-1 stock split. Prior to the split, its stock sold for…
A: Stock split ratio = 3:1 price prior to stock split = $ 80 The firms market value was unchanged after…
Q: A father deposited a total amount of P88,500 on two different investments. The first investment…
A: The concept of the time value of money states that due to the ability of invested money to earn…
Q: XYZ Ltd has spent £100,000 on research and development of a new product, expected to have a short…
A: The net present value method is used to find out the profitability of a project by discounting its…
Q: If debt and equity can be modeled as options on the firm’s assets, then the firm's shareholders have…
A: If debt and equity can be modeled as options on the firm’s assets, then the firm's shareholders have…
Q: АСTIVITY 5 An investor requires a return of 12 percent. A stock sells for P5000, it pays a dividend…
A: First we need to calculate current stock price by using constant growth model. Stock price(P0)…
Q: Comment on Stock Inspection?
A: A stock (also identified as equity) is a type of security that represents ownership of a portion of…
Q: sideration. The new machine costs $1500 and requires an additional working capital investment of…
A: Marginal tax rate 55% Book value of old asset 1500 Salvage value of old machine 750 Loss on…
Stock W has the following returns for various states of the economy:
|
State of the Economy |
Probability |
Stock W's Return |
|
Recession |
0.15 |
-10% |
|
Below Average |
0.20 |
5% |
|
Average |
0.30 |
8% |
|
Above Average |
0.25 |
12% |
|
Boom |
0.10 |
18% |
Stock W's standard coefficient of variance (CV) is
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- The standard deviation of stock returns for Stock A is 40%. The standard deviation of the market return is 20%. If the correlation between Stock A and the market is 0.70, then what is Stock A’s beta?Stock W has the following returns for various states of the economy: State of the Economy Probability Stock W's Return Recession 0.15 -10% Below Average 0.20 5% Average 0.30 8% Above Average 0.25 12% Boom 0.10 18% Stock W's standard coefficient of variance (CV) is Stock W’s Sharpe ratio assuming the risk-free is 1.25%Stock W has the following returns for various states of the economy: State of the Economy Probability Stock W's Return Recession 0.15 -10% Below Average 0.20 5% Average 0.30 8% Above Average 0.25 12% Boom 0.10 18% Stock W's expected returns is Stock W's variance is approximately to 5 decimal places [X.XXXXX]
- Stock A has the following returns over the past periods. Calculate the downside risk measured by semi-variance? (answer with 4 decimal spaces) 0.0057 -0.0255 0.0621 -0.0879 -0.0983 0.0813 0.0356 -0.0015 -0.0307 0.0427 0.0297 0.0192The expected rate of return on Delaware Shores Inc. shares is based on three possible states of the economy. These states are boom, normal and recession, which have probabilities of occurrence of 20%, 75% and 5% respectively. Which one of the following statements is correct concerning the variance of the returns on this share? a. The variance must decrease if the probability of occurrence for a boom increases. b. The variance will remain constant as long as the sum of the economic probabilities is 100%. c. The variance can be positive, zero or negative, depending on the expected rate of return assigned to each economic state. d. The variance must be positive provided that each state of the economy produces a different expected rate of return.Suppose that the index model for stocks A and B is estimated from excess returns with the following results:RA = 3% + .7RM + eARB = −2% + 1.2RM + eBσM = 20%; R-squareA = .20; R-squareB = .12Break down the variance of each stock into its systematic and firm-specific components.
- Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA= 4.0% + 0.50RM + eA RB= -1.2% + 0.7RM + eB sigmaM= 17% ; R-squareA = 0.26 ; R-squareB= 0.18 Break down the variance of each stock to the systematic and firm-specific components (write in decimal form, rounded to 4 decimal places). Risk for A Risk for B Systematic Firm-specificThe following are estimates for a stock A. Stock Expected ret. beta firm-specific variance, or Var(e) A 0.15 1.3 0.34 The market index has a standard deviation of 0.22, and the risk-free rate is 0.03 What percentage of stock A's total risk is attributable to systematic risk (or market risk)? Here consider variance as the risk measure. Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321.Use the table for the question(s) below. Consider the following probability distribution of returns for Alpha Corporation: Current Stock Price ($) Stock Price in One Year ($) Return R Probability PR $35 40% 25% $25 $25 0% 50% $20 -20% 25% The variance of the return on Alpha Corporation is closest to: Question content area bottom Part 1 A. 3.75% B. 3.625% C. 4.75% D. 5.00%
- Consider the following probability distribution of returns for Alpha Corporation: Current Stock Price ($) Stock Price in One Year ($) Return R Probability PR $35 40% 25% $25 $25 0% 50% $20 -20% 25% The variance of the return on Alpha Corporation is closest to: Question content area bottom Part 1 A. 3.75% B. 3.625% C. 4.75% D. 5.00%Stock W has the following returns for various states of the economy: Compute standard deviation for this stock. State of the Economy Probability Stock W's Return Recession 10% -30% Below Average 20% -2% Average 40% 10% Above Average 20% 18% Boom 10% 40%XYZ stock's returns will have the following probability distribution during the possible states of the economy.a. Calculate the expected return on XYZ stock.b. Calculate the standard devivation of XYZ stock returns.c. Calculate the coefficient of variation of XYZ stock.State of Economy Probability Return Boom 15% 22.75% Normal 70% 12.60% Recession 15% -15.20% Expected Return: % Standard Deviation: Coefficient of Variation: