1. Following are three economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast growth 0.24 40 % Slow growth 0.28 18 Recession 0.48 –30 Determine the standard deviation of the expected return.
2. How long (in years) would you need to save in order to save 1,000,000 if you deposited 100 weekly and there are still only 52.14 weeks in the year at a growth rate of 6%.
3. Book Depot Inc. sells on terms of 2/20, net 35. What is the implicit cost of trade credit under these terms? Use a 365- day year. Round the answer to two decimal places in percentage form.