Ford Motor Company had realized returns of 5%, 20%, -15%, and -10% over four quarters. What is the quarterly standard deviation of returns for Ford?

Q: Suppose a ten-year, $1,000 bond with an 8.1% coupon rate and semiannual coupons is trading for…

A: The yield to maturity is the total return an investor has earned by holding the bond until its…

Q: On January 1, you sold short two round lots (.e.. 200 shares) of Four Sisters stock at $52 per…

A: When a seller has a short position, they anticipate or predict that the asset's value will drop or…

Q: You manage a risky portfolio with an expected rate of return of 14% and a standard deviation of 28%.…

A: Sharpe ratio:The Sharpe ratio provides insight into how well an investment compensates for the…

Q: 29. You invested $10,000 at the end of each year for 20 years at a compound interest rate of 5%…

A: Future value of money is the amount of deposit made and amount of interest accumulated over the…

Q: Suppose today a mutual fund contains 2,000 shares of JPMorgan Chase, currently trading at $7175,…

A: When the pooling of money takes place by taking up money from several investors and using them to…

Q: Brandon is an analyst at a wealth management firm. One of his clients holds a $5,000 portfolio that…

A: StockInvestment AllocationBetaArthur Trust Inc (AT)20.00%1.5Li Corp. (LC)15.00%1.3Transfer Fuels Co.…

Q: Find the present value of $41,514 due in 5 years at an interest rate of 2.5% / year compounded…

A: Present Value is the current price of future value which will be received in near future at some…

Q: Considering the following information for stock K and stock M. Probability of state of economy State…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: 2. Find the present value of $500 due in the future under each of these conditions: a. 12% nominal…

A: Present Value is known as the current value of the future amount of money. It is represented  by the…

Q: How much would you receive with actual cash-value coverage for a four-year-old sofa destroyed by…

A: Original cost = $800Estimated life = 8 yearsReplacement cost = $855Number of years sofa used = 4…

Q: Yohoho Products enters into a contract with a customer that involves two separate performance…

A: Calculate the estimated standalone selling price of the Yoga Coach Software based on Yohoho's…

Q: What is accounting make a list of sub subject

A: Meaning of accounting: It is the process of recording financial transaction of a firm, company or of…

Q: Blossom, Inc has seven-year bonds outstanding that pay a 12 percent coupon rate. investors buying…

A: Bond Current Value:The bond's current value refers to the present worth or market price of a bond.…

Q: At age 35, Ronald earns his MBA and accepts a position as a vice president of an asphalt company.…

A: Present value can be calculated by discounting all future cash flows with the cost of capital for…

Q: George invested $1,200 at the end of every month into an RRSP for 8 years. The interest rate earned…

A: Here,Monthly Deposits is $1,200Total Years of Investment is 8 yearsInterest Rate for first five…

Q: 33% 67% 25% O 100% for free when a new product is invented?

A: Awareness is the knowledge about the product and it motivate customers to purchase the product.

Q: help!! Hector needs $13,000 in 7 years. (a) What amount should he deposit at the end of each quarter…

A: Amount needed " FV" is $13,000Time period is 7 yearsInterest rate is 7% Compounded QuarterlyTo…

Q: The table below shows the profit after tax and the book value of investment for three projects A, B,…

A: Accounting Rate of Return (ARR)- It is the ratio of the average after tax profit divided by the…

Q: JRN Enterprises just announced that it plans to cut its next-year dividend, D₁, from $2.50 to $1.10…

A: Expected dividend prior announcement = $2.50Growth rate prior announcement = 3%Stock price =…

Q: ould appreciate it if this was done in excel please A US bank converts $ 1 million to SF to make…

A: Rate of return is the profit earned on the investment as the percenatge of original investment made…

Q: 6) A stock just paid a dividend of $2.50. The required rate of return is 10.1%, and the constant…

A: Just paid dividend (D0) = $2.50Required return (r) = 0.101Growth rate (g) = 0.04Current stock price…

Q: The amount needed to pay off (Round to the nearest cent as needed.) this loan after 2 years is

A: The time value of money recognizes the idea that the value of an amount of money today differs from…

Q: Pls help me solve this without Excel. I got this incorrect. A new IT server for a company will cost…

A: Solution:-Internal Rate of Return (IRR) is the rate of return the project is yielding. It can be…

Q: Tanaka Machine Shop is considering a four-year project to improve its production efficiency. Buying…

A: The net present value is the difference between the present value of the future cash flows and the…

Q: As one of the loan officers for Grove Gate Bank, calculate the monthly principal and interest, PI…

A: Loans are taken to buy large ticket items like a house or a car. Without a loan we are not usually…

Q: Suppose you purchase a 10-year bond with 6.5% annual coupons. You hold the bond for four years and…

A: Life of bond = 10 YearsCoupon rate = 6.5%Holding period = 4 YearsYield to maturity  =5.3%

Q: Tanaka Machine Shop is considering a four-year project to improve its production efficiency. Buying…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: You have taken out a loan of $23,000 for 4 years with an interest rate of 4% compounded annually.…

A: A loan refers to a contract between a borrower and a lender where money is forwarded on the promise…

Q: Amazing Corporation, a U.S. enterprise, sold product to a customer in Wales on October 1, 20x1 for…

A: Forward rate refers to the interest that is being charged on the value of the financial transactions…

Q: 7. Find the Rate of Return (IRR-Ch 16.3) over 8 years on a project that cost $250,000 today and…

A: The internal rate of return is the amount of funds a project earns in a given period to cover its…

Q: Chocolate Mint is issuing 30-year, 9 percent callable bonds. These bonds are callable in 5 years…

A: Some bonds have option of being called before the maturity of bond period at some premium to current…

Q: where did the 60 come from?

A: Period of the loan = 5 yearsNumber of payments per year = 12

Q: Which of the following concepts is true regarding the time value of money? 1. Present value…

A: The time value of money recognizes the idea that the value of an amount of money today differs from…

Q: You want to retire at age 65. You decide to make a deposit to yourself at the end of each year into…

A: The Future Value of Annuity Payments refers to the value of a series of cash flows (payments or…

Q: gs. How much must he save during each of the next 10 years (end-of-year deposits) to meet his…

A: The time value of money recognizes the idea that the value of an amount of money today differs from…

Q: What price should be paid by an inv requires a yield of 10% p.a. (and do pay tax) on 1st January…

A: Price of bond is the present value of interest coupon payments plus present value of redemption…

Q: The Oracle preferred stock has a par value of The stock also carries a retention rate of The current…

A: Expected rate of return:The “expected rate of return” refers to the anticipated profitability or…

Q: Veighted average cost of capital Personal Finance Problem John Dough has just been awarded his…

A: The weighted average interest rate is the total interest rate paid on all debt. It is an average…

Q: Project cash flow and NPV. The managers of Classic Autos Incorporated plan to manufacture classic…

A: Annual operating cash flow refers to the cash flow from the operations generated in a year…

Q: 1. What is the present value of the above options? (FV of $1. PV of $1. EVA of $1. and PVA of $1)…

A: The time value of money recognizes the idea that the value of an amount of money today differs from…

Q: The Fl Corporation's dividends per share are expected to grow indefinitely by 6% per year. a. If…

A: Here,Growth rate (g) is 6%Expected Dividend (D1) is $7.00Market Capitalization Rate (Ke) is 8%

Q: a. Calculate the present value of an investment that pays $5,000 in two years and $4,000 in five…

A: Present value illustrates the current value of a sum of money that will be received or paid in the…

Q: You have a credit card with an APR of 24%. The card requires a minimum monthly payment of 8% of the…

A: APR  Annual Percentage Rate):The APR is the annualized representation of the interest rate on a…

Q: Equal deposits of $1200 are made at the end of each quarter in an account which earns 7.5%…

A: a.APR = 7.5% compounded monthlyFrequency, m = 12The effective annual interest rate is

Q: Quinoa Farms just paid a dividend of $3.00 on its stock. The growth rate in dividends is expected to…

A: Variables in the question:D0=$3g=4% per year (indefinitely)Required return:For the first 3…

Q: If the market rate of interest is 10%, a $13000, 13%, 10-year bond that pays interest annually would…

A: Solution:Market rate of interest means the yield prevailing in the market, while coupon rate means…

Q: The price of a non-dividend-paying stock is $100 and the continuously compounded risk-free rate is…

A: Arbitrage is a trading strategy that takes advantage of price discrepancies between related…

Q: You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of…

A: The rate that a business should pay, on average, to each of its security holders in order to fund…

Q: By 1780 or so, the British, French and Dutch sovereign debt finance systems had acquired distinct…

A: Examining the unique characteristics of each system provides insights into the diverse approaches…

Q: Find the cash value of a small vacation cottage that the Miller's bought with a down payment of…

A: Present value is an estimate of the present value of future cash values ​​that may be received at a…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.