question archive Question 12 1 points Save Answer A stock is expected to return 99 in a normal economy, 13% if the economy booms, and lose 8% if the economy moves into a recessionary period
Question 12 1 points Save Answer A stock is expected to return 99 in a normal economy, 13% if the economy booms, and lose 8% if the economy moves into a recessionary period
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Question 12 1 points Save Answer A stock is expected to return 99 in a normal economy, 13% if the economy booms, and lose 8% if the economy moves into a recessionary period. Economists predict a 6796 chance of a normal economy, a 214 chance of a boom, and a 1296 chance of a recession. The expected return on the stockis
Question 13 1 points Save Antwer Sue purchased a stock for $45 a share, held it for one year, received a $2.34 dividend, and sold the stock for $4645. What nominal rate of return did she earn? Shatinn thi chini 40
Question 14 1 points Save Answer The expected constant-growth rate of dividends is return of 16967 So for a stock currently priced at 569, that just paid a dividend of 52, and has a required A Moving to another question will save this response Question 14 of 40
Question 15 1 points Save Answer "Estimate a stock's beta based on the following return information Month 1 Stock + 1.5W, Market - 1.19 Month 2: Stock + 20%, Market. T4 Month 3: Stock 2.5%, Market - 2.0 Greater than 10 Less than 1.0 Equal to 1.0 Indeterminate
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Question 12
| Economy | Return | Probablity | Expected return |
| Normal | 9% | 67% | 6.03 |
| Booms | 13% | 21% | 2.73 |
| Recession | 8% | 12% | 0.96 |
| 9.72% |
Answer = 9.72%
Question 13
Return = [ Dividend + ( Closing price - Opening price ) ] / Opening price
= [ 2.34 + ( 46.45 - 45 ) ] / 45
= 8.42% Answer
Question 14
Required return = [ { D0 * ( 1 + g ) } / P0 ] + g
0.16 = [ { 2 * ( 1 + g ) } / 69 ] + g
0.16 = [ ( 2 + 2g + 69g ) / 69 ]
71g = 9.04
g = 9.04 / 71
g = 12.73% Answer
Question 15
Beta = Change in stock / Change on Market
| Month | Change in stock | Change in Market | Change in stock / Change in Market |
| 1 | 1.5% | 1.1% |
1.5%/1.1% = 1.36 |
| 2 | 2% | 1.4% |
2%/1.4% = 1.43 |
| 3 | -2.5% | -2.0% | -
2.5%/-2.0% = 1.25 |
Thus, beta is greater than 1.
Option A is correct.
