Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Stock Yields
The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the r…
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Subject :- Accounting 

 

Consider the investment in one stock asset. The current purchasing price of it is $20. The bet payoff in one year is given below. Market Condition Good Average Bad Probability Dividend Price 3 $ 1 $ $0 $ 0.3 0.4 0.3 $ $ 23 21 17 The risk free rate is 4%. Market risk premium is 6%. The standard deviation of holding-period returns of the market is 20%. The correlation between the bet payoff and the market portfolio is 0.6. What's the expected cash flow (answer with two decimal places)?
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Transcribed Image Text:Consider the investment in one stock asset. The current purchasing price of it is $20. The bet payoff in one year is given below. Market Condition Good Average Bad Probability Dividend Price 3 $ 1 $ $0 $ 0.3 0.4 0.3 $ $ 23 21 17 The risk free rate is 4%. Market risk premium is 6%. The standard deviation of holding-period returns of the market is 20%. The correlation between the bet payoff and the market portfolio is 0.6. What's the expected cash flow (answer with two decimal places)?
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