Question

What is the standard deviation of returns on a stock priced today at $10 that has a 25 percent probability of increasing to $13, a 50 percent probability of increasing to $12, a 15 percent probability of increasing by 5 percent, and a 10 percent probability of decreasing to $ 7?

0.0094

0.0286

0.0968

0.1692

Q2:

Josh Ackerman, having saved up a nest egg of $1.5 million, retires this year and looks forward to a 30-year retirement. If his nest egg is expected to earn 9% APR and is compounded monthly, what will be his monthly income during retirement?

$50,000.00

$17,205.12

$14,600.45

$12,069.34

Answer 1

2)

Expected ince Probability (4) Return. PXCE). (E) 30t. 751 CA 0.25 14.75 54.39 12 207. 10 y. 4.75 11.23 10.5 0.15 57. 0.75 x 110.25 15.15 -301. -3 / - 45.25 204.75 Varian 86.17 ER=15.251. Stundard Deviation = VEPCE-ED) 2 =8286.10 = 0.1692 or. 16.927 correct option = last.

c= Cash Flow	C
i= Interest Rate	0.7500%
n= Number Of Periods	360
Present Value Of An Annuity
= C*[1-(1+i)^-n]/i]
Where,
C= Cash Flow per period
i = interest rate per period
n=number of period
1500000= C[ 1-(1+0.0075)^-360 /0.0075]
1500000= C[ 1-(1.0075)^-360 /0.0075]
1500000= C[ (0.9321) ] /0.0075
C = $12069.34
Correct Option : LAST