Calculate the stock's expected return. Round your answer to two decimal places. % Calculate the standard deviation. Do not round intermediate calculations. Round your answer to two decimal places. %

Q: A bank CD that pays 7.88 percent compounded monthly. (Round answer to 2 decimal places, e.g.…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: Ten - year zero coupon bonds issued by the U.S. Treasury have a face value of $1,000, and interest…

A: Current price of bond is the price which can be paid for purchase of the bond. It is also called…

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A: High = 119.268Low = 116.615Last = 117.733Change = 0.448Yield = 5.94%To find: the coupon rate and the…

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A: NPV  is defined as the sum of the present values of all future cash inflows  less the sum of the…

Q: Use the Black-Scholes formula for the following stock: Time to expiration Standard deviation…

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A: PV(rate, nper, pmt, fv) function in excel is used to compute the required present value. Where;rate…

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A: The concept of time value of money will be used here. As per the concept of time value of money the…

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A: Here,Cost of Asset is $420,000Life of Asset is 3 yearsDepreciation Method is Straight Line…

Q: The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a…

A: PriceShares (In million)1/1/191/1/201/1/21Douglas McDonnell210$94$97$111Dynamic…

Q: Present Value Years $ 140 260 3182 17 29,000 28,261 20 Interest Rate % SA Future Value 160 625…

A: Future value is the amount of deposit done and amount of compounded interest accumulated over the…

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A: Monthly payment refers to an amount that is paid every month for the repayment of a loan amount…

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Q: Multiple Choice O O O $236,032. $223,968. $230,000.

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Q: What nominal interest rate compounded continuously is equivalent to j4 = 15%? Answer: 14.72 %

A: Compound = n = j4 = Quarterly = 4Interest rate = r = 15%

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A: The after-tax rate of return reflects the overall profitability of the investment after considering…

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A: The Sustainable Growth rate refers to the maximum growth that a company can provide in a stand alone…

Q: On January 1, a company issues bonds dated January 1 with a par value of $230,000. The bonds mature…

A: Par Value230000Coupon Rate0.035 Required Rate of Return0.04 YearCouponPresent Value Factor…

Q: You estimate that by the time you retire in 35 years, you will have accumulated savings of $3.2…

A:

Q: You are offered the opportunity to put some money away for retirement. You will receive 10 annual…

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Q: Suppose you purchase a 30-year Treasury bond with a 5% annual coupon, initially trading at par. In…

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Q: An investor is considering an investment that will pay $2,280 at the end of each year for the next…

A: Payment = p = $2280Time = t = 10Rate of Return = r = 12%

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A: Profitability index (PI) is an important capital budgeting tool. It is used to determine whether a…

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A: When assets, excluding cash, increase, cash may remain unchanged or decrease depending on whether…

Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…

A: Expected return of the stock fund16%Expected return of the bond fund12%Risk-free rate7.00%Standard…

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Q: Consider the case of Badger Corp.: Badger Corp. has 9% annual coupon bonds that are callable and…

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Q: The Moraine Company has net income of $167,850. There are currently 32.65 days' sales in…

A: The ratios can be helpful for the investors to determine the company's financial peformance. The ROE…

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A: Simple interest is a method of calculating interest on a principal amount of money over a specified…

Q: A recent edition of The Wall Street Journal reported interest rates of 3.95 percent, 4.30 percent,…

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Q: The financial information below is for Mat Moery, who works as an administrative assistant in a law…

A: Net worth - If all assets of the company are cashed out to pay off outstanding liabilities, the…

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A: The given data is as follows:Expected return on stock A, Risk-free rate of return, Standard…

Q: loan is below. Payments of $1,987.26 are made monthly. Payment # Payment Interest Debt Payment…

A: A loan refers to a contract between two parties where money is forwarded by one party to the other…

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A: Savings account:A savings account is a financial product offered by banks and credit unions that…

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A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: Martinez Corporation issues $630,000 of 9% bonds, due in 11 years, with interest payable…

A: Issue price of bonds would be the present value of the interest annuity & maturity amount at…

Q: Your company currently has $1,000 par, 5.25% coupon bonds with 10 years to maturity and a price of…

A: Coupon amount refers to the amount that is paid at every period including the principal and interest…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.