Q3) Consider the following two companies and their forecasted returns for the upcoming year: (picture)   A. What is the standard deviation of the returns on each company's stock (Company A, and B) (write all formulas). B. Of these two stocks, which is riskier? Justify your answe

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A: Formulas:

Q: LO 1 7. Calculating Returns and Standard Deviations Based on the following information, calculate…

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Q: How to start this question? g) Use the following two stocks. Scenario Probability Stock A Stock B…

A: Stock A:    Stock B:

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A: we will only answer the first three subparts. for the remining subparts kindly resumbit the question…

Q: You were analyzing a stock and came up with the following probability distribution of the stock…

A: Formula for calculating the coefficient of variation for stocks would be= Standard deviation/ mean

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A: Coefficient of Variation = Standard Deviation / Mean

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A: D1 is $1.5 g is 6.5% Price Po is $56   To Find: Expected capital gain yield.

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A: Formula to be used: Mean(X̄)=∑X/n Variance=∑ (X-X̄)^2)/n Standard deviation (SD)=√(∑(X-X̄)^2)/n…

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A: a) Computation of risk premium on common stock: Working note:

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A: Given Information:

Q: The table below shows information about the performance of stocks A and B last year.   Return…

A: The coefficient of variation of Stock A is 0.55 (8.3%/15%) and Stock B is 0.15 (2.1%/14%). Stock B…

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A: The nature of stock that may comprise of small or medium or large capital, dividend policy, risk…

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A: Risk Premium for each year = Stock market return of each year - T Bill returns of each year Years…

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A: Coefficient of variation shows the risk -reward trade off between the return and risk of the stock…

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A: For calculating the standard deviation using the following formula. SD = ∈[ P(GR-ER)2]  Where  P =…

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A: Risk premium is the extra return that the investor expects to get for bearing the risk on a stock.

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A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: what are the two type parts of most stocks expected total return? if D1=$2.00, g= 6% and po $40.00,…

A: Annual dividend (D1)= $2  Growth rate (g)= 6% Current stock price (P0)= $40

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A: Formulas to calculate Mean & Standard Deviation is: E(r) = Summation of p(s)*r(s) Sigma^2 =…

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Q: Q4: Assume the following information for stocks A and B. • Expected return on Stock A = 18%. •…

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A: Given information: Beta of stock A is 1.30 Beta of stock B is 1.60

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A: Formulas:

Stock Market Indices

Stock indexes are used to compare the price fluctuations of a group of stocks of similar companies, which are combined based on a similar industry or a particular market capitalization limit or type of market. The price comparison is based on a pre-determined standard method or indicators. These stock indexes are usually considered a base for comparison of a particular stock, and the performance of that particular company can be easily determined.