# Complete Problems 1, 2, and 3 from the Questions and Problems section of Chapter 11 (shown below). R

Aug 3rd, 2016
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Complete Problems 1, 2, and 3 from the Questions and Problems section of Chapter 11 (shown below). Remember to complete all parts of the questions, and report the results of your analysis. a. Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone. State of Economy Probability of State of the Economy Security Return if State Occurs Recession .30 -8% Normal .40 13 Boom .30 23 Using the information in the previous question, calculate the standard deviation of returns. Repeat Questions 1 & 2 assuming that all three states are equally likely.

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5Complete Problems 1, 2, and 3 from the Questions and Problems section of Chapter 11 (shownbelow). Remember to complete all parts of the questions, and report the results of your analysis.a. Use the following information on states of the economy and stock returns to calculate theexpected return for Dingaling Telephone.State of Economy Probability of State of the Economy Security Return if State OccursRecession.30-8%Normal.4013Boom.3023Using the information in the previous question, calculate the standard deviation of returns.Repeat Questions 1 & 2 assuming that all three states are equally likely...Calculation of Expected Return and Standard Deviation of Dingaling Telephone Stockgiven consideration of different probability of different state of economyExpected Return of Dingaling Telephone StockSchedule for Expected Return CalculationProbability of StateSecurity Return ifState of Economyof the Economy, PiState Occurs, RiRecession0.30-8.00%Normal0.4013.00%Boom0.3023.00%WeightedReturn (Pi*Ri)-2.40%5.20%6.90%9.70%Expected Return = 9.70%Standard D

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