A stock is expected to earn 10.0% over the next year with a 40% probability and 3.0% otherwise. What is the standard deviation of returns based on this scenario analysis? Answer in percent, rounded to one decimal place.
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- The stock yields for three years are given as 0.15, -0.10 and 0.12, respectively. Which is the geometric mean return accordingly?Consider the rate of return of stocks ABC and XYZ. Year 12345n ភ្នំឧ១៣៧. ABC ABC XYZ 22% 10 ABC 19 3 1 a. Calculate the arithmetic average return on these stocks over the sample period. (Round your answers to 2 decimal places.) Arithmetic Average XYZ 36% 10 17 0 -8 ABC XYZ b. Which stock has greater dispersion around the mean return? % c. Calculate the geometric average returns of each stock. What do you conclude? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Geometric Average %The next year's return on stock X is expected to be either -7% with probability 0.2 or 20% with probability 0.8. Find the stnadard deviation of the returns. a.12.37% b.11.10% c.12.88% d.11.69% e.10.80%
- Suppose the returns on a small stock are normally distributed. The historical average return is 18 percent, and the standard deviation is 6 percent. What is the probability that your return on this stock will be no less than 12 percent in a given year? What range of returns would you expect to see 95 percent of the time? What range would you expect to see 99 percent of the time?An analyst gathered the following information for a stock and market parameters: stock beta = 1.23; expected return on the Market = 9.32%; expected return on T-bills = 4.75%; current stock Price = $9.08; expected stock price in one year = $13.1; expected dividend payment next year = $3.8. Calculate the expected return for this stock. Please share your answer as a percentage rounded to 2 decimal places.An analyst gathered the following information for a stock and market parameters: stock beta = 1.42; expected return on the Market = 11.41%; expected return on T-bills = 2.12%; current stock Price = $9.64; expected stock price in one year = $12.81; expected dividend payment next year = $1.54. Calculate the required return for this stock. Please share your answer as a percentage rounded to 2 decimal places.
- Using 25 years of data, you estimate the arithmetic average return for a certain stock to be 5.5% and the geometric average return to be 4.6%. Using Blume's formula, what is your average forecasted return over a 5 year period?An analyst gathered the following information for a stock and market parameters: stock beta = 0.757; expected return on the Market = 11.65%; expected return on T-bills = 3.02%; current stock Price = $9.92; expected stock price in one year = $8.20; expected dividend payment next year = $2.92. Calculate the required return and expected return for this stock. Please write your answers as percentages (e.g. 1234 should be written as 12.34): A. Required Return: B. Expected Return: % %Suppose that your estimates of the possible one-year returns from investing in the common stock of the AYZ Corporation were as follows: Probability of occurrence 0.15 0.25 0.3 0.15 0.15 Possible return -10% 5% 20% 35% 50% What are the expected return? Calculate the standard deviation?
- The returns of a stock follow the normal distribution, with average return of 13.2% and standard deviation of 23.7%. What is the probability that in any given year, the stock's return will be between -34.2% and +36.9%? Assume the following: the one standard deviation probability range is 0.68; the two standard deviation probability range is 0.95; and the three standard deviation probability range is 0.99. 0.685 O 0.955 O 0.750 0.815 O 0.950Assume that the risk-free rate is 3.5% and the expected return on the market is 10%. What is the required rate of return on a stock with a beta of 0.7? Round your answer to two decimal places.A stock has an expected return of 15.9 percent and a beta of 1.70, and the expected return on the market is 10.10 percent. What must the risk-free rate be? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)