Suppose you have a project that has a .7 chance of doubling your investment in a year and a .3 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment?
Q: You are looking at an investment that has an effective annual rate of 14 percent. (show answers and…
A: Effective annual rate = 14%
Q: According to the Rule of 72, what must the return on an investment be to double an initial…
A: Investors have different options to make investments, and the motive behind investments is to…
Q: Suppose an initial investment of $100 returns $40 at the end of the first year and $80 at the end of…
A:
Q: Assuming you are facing making a decision on a large capital investment proposal. the capital…
A: To find the answers, we will first have organize the cashflows associated with the project. Please…
Q: You have an investment opportunity that requires an initial investment of $3,600 today and will pay…
A: The present value is the value of the sum received at time 0 or the current period. It is the value…
Q: If you receive a total return of 6% on your investment portfolio but inflation is running at 3% per…
A: Given the following information: Nominal return: 6% Inflation rate: 3%
Q: You are considering the purchase of real estate that will provide perpetual income that should…
A: The amount you pay for the property = Perpetual Income / Required Rate of Return
Q: A potential project requires an initial investment of $45,000 at the beginning of the 1st year, and…
A: Initial investment = $ 45,000 Annual cash inflow = $ 35,000 Period = 3 Years Required rate of return…
Q: An investment offers a 14 percent total return over the coming year. Bill Bernanke thinks the total…
A: return rate in coming year = 14% real return= 9%
Q: sent worth of income from an investment that follows an arithmetic gradient was projected to be P…
A: Gradient mean that there is constant growth of annuity by the fixed interval and in this we need to…
Q: What is the dollar-weighted return on a $100 investment that generates annual returns of $20, $15,…
A: Return is that portion which a person receives over the investment amount during the whole period.…
Q: Cellgene Biometrics, a small biotech company, uses a MARR of 40% per year when evaluating new…
A:
Q: You are considering an investment opportunity that requires an initial investment of $148 million in…
A: IRR is an important capital budgeting tool. IRR is that rate at which NPV (net present value) is…
Q: From the given values below, which machine should be selected using (a) Present worth Method and (b)…
A: Present Worth: It is the present value of the annual cash flows and the cost of the project…
Q: Consider an investment that costs $100,000 and has a cash inflow of $25,000 every year for 5 years.…
A: Capital budgeting is the process by which a corporation examines potential large projects or…
Q: You have an investment opportunity that requires an initial investment of $5,000 today and will pay…
A: The rate of return is the rate at which the amount is invested or the investor will receive the…
Q: An initial investment of £80,000 has an interim return of £30,000 in year 5 and a final return of…
A: The IRR is the discount rate where the cash outflows are equal to the cash inflows and the net…
Q: Consider an investment that offers $4,000, $5,000 and $6,000 in the next 3 years, with the first…
A: Present value is the concept of time value of money. Time value of money concept states that value…
Q: Your firm has a risk-free investment opportunity where it can invest $160,000 today and receive…
A: Calculation of Interest Rate of the Project:The Interest Rate of the Project can be calculated using…
Q: About how many years would it take for your investment to grow if it were invested at an APR of 9…
A: In the given question we require to calculate the the number of years that make the investment…
Q: About how many years would it take for your investment to grow threefold if it were invested at an…
A: In the given problem we require to calculate the number of years that will make the investment three…
Q: Consider an asset that costs $120 today. You are going to hold it for 1 year and then sell it.…
A: The expected return of a portfolio is the weighted average of the return of the individual…
Q: A project has a 0.92 chance of doubling your investment in a year and a 0.08 chance of halving your…
A: The standard deviation of the rate of return is used in order to estimate the extent to which a…
Q: a) If you invest $5 and will receive $8 next year, what is your simple return? b) If you invest $5…
A: Given:Investing an amount of$5 and receive $8 in next yearTo compute:a) Simple returnb) Holding rate…
Q: Consider two investment projects, which both require an upfront investment of $8 million, and both…
A: IRR is the rate at which NPV is zero.
Q: You are considering the purchase of real estate that will provide perpetual income that should…
A: Calculate the rate of return on market portfolio as follows:Rate of return on market portfolio is…
Q: An investor is evaluating a "boom or bust" investment that in some years will generate an excellent…
A: Investment is that under which investor will deposit/ invest the surplus cash in stock , bank or any…
Q: QUESTION 7 A project has a 0.8 chance of quintupling your investment in a year and a 0.2 chance of…
A: The standard deviation measures how spread the returns are. The probabilities of different returns…
Q: Your firm has a risk-free investment opportunity with an initial investment of $162,000 today and…
A: Calculation of Interest Rate of the Project:The Interest Rate of the Project can be calculated using…
Q: Joan, the project manager, asks you to evaluate alternatives A and B on the basis of their PW values…
A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,…
Q: Suppose an investment offers to triple your money in 12 months. What rate of return per quarter are…
A: In this question we requires to calculate rate of return per quarter that will make our money triple…
Q: Consider an investment that costs 100,000 and has a cash inflow of 30,000 every year for 5 years.…
A: Given Information, Initial Cost =100,000 Cash Inflow = 30,000 Annually Time Period =5 years…
Q: Approximately, what is the value of PG (present worth of arithmetic gradient) if G=185, n=7 years,…
A: gradient = 185 time period = 5 interest rate = 7.5% below is the given formula to calculate present…
Q: The expected return of your investment is %. (Round to one decimal place.)
A: Expected Return on Investment: It is the rate of return made by the investor for holding the…
Q: If an investment of $2,000 grew to $2,520 in three periods, what is the interest rate at which the…
A:
Q: An investor is considering a project which requires an outlay of 3 million pounds initially (t = 0),…
A: Internal rate of return (IRR) is a metric used by corporations to determine the rate of return on…
Q: What ODE does the last function satisfy? Let the initial investment be $1000 andr=6%. Compute the…
A: Initial investment is $1,000 Rate of interest is 6% To Find: Value of investment after 1 year.…
Q: A geometric gradient that increases at ? = 6% per year for 15 years is shown in the accompanying…
A: It is given that:P = $500 Growth g- 6% Interest r- 12% Time n – 15 yrs
Q: A similar application for investment yields can be made in cases where monthly cash annuities will…
A: PRESENT VALUE 51593 NPER (n) 240 PMT 400 FUTURE VALUE 0
Q: A project has a 0.6 chance of tripling your investment in a year and a 0.4 chance of halving your…
A: Standard deviation =square root of sum of Probability*(Return-Mean)^2
Q: What is the geometric average return over one year if the yearly returns are -9%, 8%, 5%, and 14%,…
A: geometric average return formula: geometric average return = 1+r1×1+r2×1+r3×1+r414-1
Q: Consider an EOY geometric gradient, which lasts for eight years, whose initial value at EOY one is…
A: Calculation of p0 The value of P0 can be calculated by using the following formula P0=…
Suppose you have a project that has a .7 chance of doubling your investment in a year and a .3 chance of halving your investment in a year. What is the standard deviation of the
on this investment?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- A project 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 rate of return on this investment?A project has a 0.68 chance of doubling your investment in a year and a 0.32 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment?Suppose you have a project that has a 0.4 chance of tripling your investment in a year and a 0.6 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 percentage rounded to 2 decimal places.) What is the standard deviation?
- 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.)A project has a 0.92 chance of doubling your investment in a year and a 0.08 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. Round your answer to 2 decimal places.)Suppose you have a project that has a 0.5 chance of tripling your investment in a year and a 0.5 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 percentage rounded to 2 decimal places.) Standard deviation %
- Your expectations from a one year investment in Wang Computers are as follows: Probability Rate of Return .15 -.10 .15 -.20 .35 .00 .25 .15 .10 .15 expected rate of return? standard deviation? coeefecient of variation on investment?If you are promised a nominal return of 16%, on a one-year investment, and you expect the rate of inflation to be 2%, what real rate do you expect to earn? Use the Fisher equation, NOT the approximation.An investment has an expected return of 12 percent per year with a standard deviation of 6 percent. Assuming that the returns on this investment are at least roughly normally distributed, what percentage of the time do you expect to lose money?
- Suppose you have a project that has a 0.6 chance of doubling your investment in a year and a 0.4 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 percentage rounded to 2 decimal places.) Answer is complete but not entirely correct. 40.99 Standard deviation %Consider an investment whose annual return is normally distributed with a mean of 6% and a standard deviation of 14%. (a) What is the probability that I lose money on this investment, in any given year? Please express your answer as a percentage, to the nearest ten basis points. Probability of Losing Money = (b) What is the 10% value at risk on the investment? Please express your answer as a percentage, to the nearest ten basis points. VaR 0.1 = % % (c) If I invest in this asset, how much should expect to lose in my worst year out of 10? Please express your answer as a percent, to the nearest ten basis points. %A project will double your investment in one year with probability 0.58, otherwise you'll lose half of your investment. What is the standard deviation of this investment? Enter answer in percents, to two decimal places.