4-A stock\'s price is $100 at the beginning of a year. There is a 25 percent cha

Question

4-A stock's price is $100 at the beginning of a year. There is a 25 percent chance that the price will be $90 at the end of the year, and a 75 percent chance that the price will be $130 at the end of the year. The stock will pay a dividend of $10 during the year.

Calculate the stock's expected return.

40%

30%

35%

50%

5-A stock's price is $100 at the beginning of a year. There is a 25 percent chance that the price will be $90 at the end of the year, and a 75 percent chance that the price will be $130 at the end of the year. The stock will pay a dividend of $10 during the year.


Calculate the standard deviation of the stock's return. Enter the numer as a percentage withouta '%' sign and round to two decimal places.

40%

30%

35%

50%

Explanation / Answer

4.

Stocks expected future value=25%*90+75%*130=120

stock's expected return=(capital return+dividend return)/initial investment

=(120-100+10)/100=30%

the above is the answer

we do only one question based on Chegg rule.

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