1the stock of gandaki ltd gl performs relatively well as, Ask an Expert

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1. The stock of Gandaki Ltd. (GL) performs relatively well as compared to other stocks during recessionary periods. The stock of Tanahu Ltd. (TL), on the other hand, does well during growth periods. You assess the rupee return (Dividend plus price) of these stocks for next year as follows:

Economic Condition
High Growth low Growth Stagnation Recession
Probability 0.3 0.4 0.2 0.1
Return on Gandaki’s Stock (Rs.) 100 110 120 140
Return on Tanahu’s Stock (Rs.) 150 130 90 60

Both stocks are currently selling for Rs. 100 per share. Assume that you want to buy 10 shares of GL, calculate the expected return and standard deviation of the same. (10+15)

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92477296

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