8.) There are three assets to be considered: stocks, bonds, and commodities. The current prices of these assets are listed below:
Asset | Current Price |
Stocks | $500 |
Bonds | $1000 |
Commodities | $200 |
The following table lists the possible prices of these assets a year from today, with the corresponding probabilities.
Stocks | Bonds | Commodities | |||
Probability | Price | Probability | Price | Probability | Price |
0.25 | $700 | 0.4 | $1100 | 0.2 | $250 |
0.25 | $650 | 0.6 | $1050 | 0.25 | $240 |
0.25 | $600 | 0.25 | $230 | ||
0.25 | $550 | 0.3 | $220 |
What is the expected return (in %) of stocks? Round your answer to at least 2 decimal places.
8.) There are three assets to be considered: stocks, bonds, and commodities. The current prices of...
There are three assets to be considered: stocks, bonds, and commodities. The current prices of these assets are listed below: Asset Current Price Stocks $500 Bonds $1000 Commodities $200 The following table lists the possible prices of these assets a year from today, with the corresponding probabilities. Stocks Bonds Commodities Probability Price Probability Price Probability Price 0.25 $700 0.4 $1100 0.2 $250 0.25 $650 0.6 $1050 0.25 $240 0.25 $600 0.25 $230 0.25 $550 0.3 $220 1.)What is...
1. Stock prices and stand-alone risk The S&P 500 Index is one of the most commonly used benchmark indices for the U.S. equity markets. Consisting of 500 companies, it is a market value-weighted index. This means that each company's performance is reflected in the index, weighted by the ratio of the company's value to the total value of all the companies. Based on your understanding of P/E ratios, in which of the following situations would the average trailing P/E ratio...