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A project's cash flows have a beta of 1.20, a standard deviation of $900, and a...
A project with an initial cost of $61,600 is expected to provide annual cash flows of...
A project with an initial cost of $61,600 is expected to provide annual cash flows of $12,600 over the 8-year life of the project. If the required return is 8.8 percent, what is the project's profitability index? Multiple Choice Ο 1.141 Ο Ο Ο Ο 1.046
The x-axis should be labeled... a. Expected return. b. Standard deviation. e. Coefficient of variation d....
The x-axis should be labeled... a. Expected return. b. Standard deviation. e. Coefficient of variation d. Beta. e. None of the above Which of the following statements is CORRECT? a. If a project has normal cash flows, then its IRR must be positive. b. If a project has normal cash flows, then its MIRR must be positive. c. If a project has normal cash flows, then it can have two NPVs. d. If a project has normal cash flows, then...
Consider the probability distribution of the first year cash flows for the DEF Project: Project Cash...
Consider the probability distribution of the first year cash flows for the DEF Project: Project Cash Flow Probability $1,000 20% $2,000 60% $3,000 20% Please show all work, step by step, for a thumbs up! Thanks!! Calculate the range of possible cash flows Calculate the expected cash flow Calculate the standard deviation of the possible cash flows Calculate the coefficient of variation of the possible cash flows
EXTRA RISK PROBLEMS Stock A Stock B Expected Return 10% 1 Standard Deviation Beta Correlation coefficient with the...
EXTRA RISK PROBLEMS Stock A Stock B Expected Return 10% 1 Standard Deviation Beta Correlation coefficient with the Market Correlation coefficient with Stock B Risk free rate 25% Expected return on the Market 12% Standard deviation of the Market 18 1. What is the expected return on a portfolio comprised of $6000 of Stock A and S4000 of Stock B? 2. What is the Standard deviation of this portfolio? 3. Does it make sense to combine these two in this...
The following are estimates for two stocks. Stock Expected Return Beta Firm-Specific Standard Deviation A 10...
The following are estimates for two stocks. Stock Expected Return Beta Firm-Specific Standard Deviation A 10 % 0.70 28 % B 18 1.25 42 The market index has a standard deviation of 22% and the risk-free rate is 7%. a. What are the standard deviations of stocks A and B? (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. Suppose that we were to construct a portfolio with proportions: Stock A 0.35 Stock B 0.35 T-bills...
Project A Project B Probability Cash Flows Probability Cash Flows $6,250 0.6 0.6 $6,500 $6,750 $6,500...
Project A Project B Probability Cash Flows Probability Cash Flows $6,250 0.6 0.6 $6,500 $6,750 $6,500 $17,000 BPC has decided to evaluate the riskier project at 13% and the less-risky project at 10%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. What is each project's expected annual cash flow? Round your answers to two decimal places. Project A: $ 6500...
Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock...
Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y has a 12.0% expected return, a beta coefficient of 1.1, and a 30.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CVx = CVy = Which stock is riskier for a diversified investor? For...
Question four (b) Machines Alpha and Beta have the following cash flows: Cash flows (Shs '000")...
Question four (b) Machines Alpha and Beta have the following cash flows: Cash flows (Shs '000") Co C3 CA C co Alpha -480 440 480 520 560 600 640 Beta -480 440 484 532 Machine Omega was purchased five years ago for Shs 800,000 and produces an annual cash flow of Shs 320,000. It has no salvage value but is expected to last another five years. The company can either replace Omega with Alpha now or replace it with Beta...
11. The square of the standard deviation is known as the ________. A. Beta B. Expected...
11. The square of the standard deviation is known as the ________. A. Beta B. Expected return C. Coefficient of variation. D. Variance 12. Why companies invest in projects with negative NPV? A. Because there is hidden value in each project B. Because they have chance of rapid growth C. Because they have invested a lot D. All of the given options 13. An investor was expecting a 18% return on his portfolio with beta of 1.25 before the market...
Q1) A stock fund has an expected return of 15% and a standard deviation of 25%...
Q1) A stock fund has an expected return of 15% and a standard deviation of 25% and a bond fund has an expected return of 10% and a standard deviation of 10%. The correlation between the two funds is 0.25. The risk free rate is 5%. What is the (a) expected return and (b) standard deviation of the portfolio with 70% weight in the stock portfolio and 30% weight in the bond portfolio? Q2) The variance of Stock A is...
A project with an initial cost of $61,600 is expected to provide annual cash flows of $12,600 over the 8-year life of the project. If the required return is 8.8 percent, what is the project's profitability index? Multiple Choice Ο 1.141 Ο Ο Ο Ο 1.046
The x-axis should be labeled... a. Expected return. b. Standard deviation. e. Coefficient of variation d. Beta. e. None of the above Which of the following statements is CORRECT? a. If a project has normal cash flows, then its IRR must be positive. b. If a project has normal cash flows, then its MIRR must be positive. c. If a project has normal cash flows, then it can have two NPVs. d. If a project has normal cash flows, then...
EXTRA RISK PROBLEMS Stock A Stock B Expected Return 10% 1 Standard Deviation Beta Correlation coefficient with the Market Correlation coefficient with Stock B Risk free rate 25% Expected return on the Market 12% Standard deviation of the Market 18 1. What is the expected return on a portfolio comprised of $6000 of Stock A and S4000 of Stock B? 2. What is the Standard deviation of this portfolio? 3. Does it make sense to combine these two in this...
Project A Project B Probability Cash Flows Probability Cash Flows $6,250 0.6 0.6 $6,500 $6,750 $6,500 $17,000 BPC has decided to evaluate the riskier project at 13% and the less-risky project at 10%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. What is each project's expected annual cash flow? Round your answers to two decimal places. Project A: $ 6500...
Question four (b) Machines Alpha and Beta have the following cash flows: Cash flows (Shs '000") Co C3 CA C co Alpha -480 440 480 520 560 600 640 Beta -480 440 484 532 Machine Omega was purchased five years ago for Shs 800,000 and produces an annual cash flow of Shs 320,000. It has no salvage value but is expected to last another five years. The company can either replace Omega with Alpha now or replace it with Beta...
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