Scribd Logo
Upload

Welcome to Scribd!

  • 7 views

    Finman 2 - Quiz

    Uploaded by

    Maybelle Bernal
    This document contains two quiz questions about analyzing investments and making inventory decisions. The first question provides return rates for three stocks in different economic states and asks to calculate the expected return and standard deviation for two portfolios combining these stocks. The second question is about a dealer ordering luxury yachts, where it asks to compute the expected value of ordering different numbers of yachts, as well as the expected value with perfect information and of perfect information.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content

    You might also like

    Finman 2 - Quiz

    Uploaded by

    Maybelle Bernal
    7 views1 page
    This document contains two quiz questions about analyzing investments and making inventory decisions. The first question provides return rates for three stocks in different economic states and asks to calculate the expected return and standard deviation for two portfolios combining these stocks. The second question is about a dealer ordering luxury yachts, where it asks to compute the expected value of ordering different numbers of yachts, as well as the expected value with perfect information and of perfect information.

    Original Description:

    Original Title

    FINMAN 2 -QUIZ

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    This document contains two quiz questions about analyzing investments and making inventory decisions. The first question provides return rates for three stocks in different economic states and asks to calculate the expected return and standard deviation for two portfolios combining these stocks. The second question is about a dealer ordering luxury yachts, where it asks to compute the expected value of ordering different numbers of yachts, as well as the expected value with perfect information and of perfect information.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    7 views1 page

    Finman 2 - Quiz

    Uploaded by

    Maybelle Bernal
    This document contains two quiz questions about analyzing investments and making inventory decisions. The first question provides return rates for three stocks in different economic states and asks to calculate the expected return and standard deviation for two portfolios combining these stocks. The second question is about a dealer ordering luxury yachts, where it asks to compute the expected value of ordering different numbers of yachts, as well as the expected value with perfect information and of perfect information.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 1

    FINMAN 2

    QUIZ

    1. The following projections are available for three alternative investments in


    equity stocks.(15PTS)

    State of Probability of Rate of Return if State Occurs


    Economy State of
    Economy
    Stock A Stock B Stock C
    Boom 0.40 10% 15% 20%
    Recession 0.60 8% 4% 0%

    a. What would be the expected return on a portfolio with equal amounts invested
    in each of the three stocks? (Portfolio 1)
    b. What would be the expected return if half of the portfolio were in A, with the
    remainder equally divided between B and C? (Portfolio 2)
    c. Compute for the Standard Deviation using expected Portfolio 1 and Portfolio 2.

    2. A dealer in luxury yachts may order 0, 1, or 2 yachts for this season’s


    inventory. The cost of carrying each excess yacht is Php50,000 and the gain
    for each yacht sold is Php200,000.(15 PTS)

    a. Compute for the expected value of each decision.


    b. What is the expected value with perfect information?
    c. What is the expected value of perfect information?

    You might also like