An assignment has an expected cash flow of $300 in year 3. The risk free interest rate is 5%. The market risk premium is 8 percent. The projects Beta is 1.25. Compute the certainty equivalent cash flow for year 3.
You invest equal amounts in a portfolio with an expected return of 16% and a standard deviation of returns of 20% and a risk free asset with an interest rate of 4 percent. Compute the standard deviation of the returns on the resulting portfolio.
Stock P and Q have annual returns of -10%, 12%, 28% and 8%, 13%, 24 percent respectively. Compute the covariance of return between securities.
A firm has paid a dividend of $2 / share out of earnings of $4 / share. If the book value per share is $25 and it is currently selling for $40 / share, compute the required rate of return on stock.
If present value of $1 received and years from today at an interest rate r is 0.621, then find the future value of $1 invested today at an interest rate of r% for n years?