1. Playing with a coin toss game, the expected outcome of the bet is that you will lose $20. If you win the coin toss,you will recieve $80. How much will you pay out if lose the coin toss?
2. The expected value of a normal distribution of prices for a stock is $50. If you are 90% sure that the price of the stock will be between %40 and $60. what is the standard deviation of the price of the stock?
3. You own a common stock that just paid an annual dividend of $4.50. The firm expects to grow at a 3.5% constant rate for the foreseeable. If the required rate of return for the stock is 11.4%, then what is the price that you should be able to sell the stock for now?