Question

Problem 7-15 Suppose you have a project that has a 0.3 chance of tripling your investment in a year and a 0.7 chance of halvi

0 0
Add a comment Improve this question Transcribed image text
✔ Recommended Answer
Answer #1

Hello Sir/ Mam

YOUR REQUIRED ANSWER IS 1.1456

Economy Probability Returns P*R (Return - Mean)^2 * P
Triple 30% 200.00% 60.000% 0.9187500
Half 70% -50.00% -35.000% 0.3937500
Mean 25.00% 1.31250
S.D. 1.1456

I hope this solves your doubt.

Feel free to comment if you still have any query or need something else. I'll help asap.

Do give a thumbs up if you find this helpful.

Add a comment
Know the answer?
Add Answer to:
Problem 7-15 Suppose you have a project that has a 0.3 chance of tripling your investment...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
  • Suppose you have a project that has a 0.8 chance of tripling your investment in a...

    Suppose you have a project that has a 0.8 chance of tripling your investment in a year and a 0.2 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 4 places.) Suppose you have a project that has a 0.8 chance of tripling your investment in a year and a 0.2 chance of halving your...

  • Suppose you have a project that has a 0.8 chance of tripling your investment in a...

    Suppose you have a project that has a 0.8 chance of tripling your investment in a year and a 0.2 chance of doubling your investment in a year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 4 places.) Standard deviation

  • Suppose you have a project that has a 0.9 chance of tripling your investment in a...

    Suppose you have a project that has a 0.9 chance of tripling your investment in a year and a 0.1 chance of doubling your investment in a year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.) Standard deviation

  • A project has a 0.7 chance of doubling your investment in a year and a 0.3...

    A project has a 0.7 chance of doubling your investment in a year and a 0.3 chance of halving your investment in year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Standard deviation

  • Suppose you have a project that has a 0.8 chance of doubling your investment in a...

    Suppose you have a project that has a 0.8 chance of doubling your investment in a year and a 0.2 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 4 places.) Standard deviation

  • suppose you have a project that has a 0.6 chance of tripling your investment in a...

    suppose you have a project that has a 0.6 chance of tripling your investment in a year and a 0.4 chance of halving your investment in a year. What is the standard deviation of the rte of return on this investment? please explain calculations

  • Problem 6-15 Project NPV and IRR A project requires an initial investment of $100,000 and is...

    Problem 6-15 Project NPV and IRR A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $26,700 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 21% and can claim 100% bonus depreciation on the investment. Suppose the opportunity cost of capital is 9%. Ignore inflation. a. Calculate project...

  • Problem 6-30 Calculating EAR (L04] You are looking at an investment that has an effective annual...

    Problem 6-30 Calculating EAR (L04] You are looking at an investment that has an effective annual rate of 146 percent. a. What is the effective semiannual return? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) b. What is the effective quarterly return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e... 32.16.) c. What is the effective monthly return? (Do...

  • 32. Samuel Paul has invested in a project which has a 0.8 chance of doubling his...

    32. Samuel Paul has invested in a project which has a 0.8 chance of doubling his investment in a year and a 0.2 chance of halving his investment in a year. What is the standard deviation of the rate of return on this investment? a. 46.5% b. 63.2% c. 60.0% d. 67.1%

  • The YTM on a bond is the interest rate you earn on your investment if interest...

    The YTM on a bond is the interest rate you earn on your investment if interest rates don’t change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). a. Suppose that today you buy a bond with an annual coupon of 7 percent for $1,160. The bond has 15 years to maturity. What rate of return do you expect to earn on your investment? (Do not round intermediate calculations...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT