Write a comprehensive note on exploring the role of

Question

Essay writing

 Write a comprehensive note on exploring the role of financial management in promoting sustainable business practices and development.

Problem solving

1) Ahmad has purchased Apple stock that is expected to earn 20 percent in a booming economy, 10 percent in a normal economy, and lose 5 percent in a recessionary economy. There is a 15 percent probability of a boom and a 50 percent chance of a normal economy. What is your expected rate of return on this stock?

2)Continuing with above question, what would be the standard deviation of Apple stock?

3)What is the expected return on a portfolio which is invested 50 percent in Apple Stock and the remainder in Google?

State of the economy	Probability of state of economy	Return if State Occurs
		Apple	Google
Boom	10%	20%	25%
Normal	20%	10%	10%
Recession	70%	-10%	5%

 4) If correlation among prices of Bond A and B is 0.5, calculate risk on the portfolio.

 

Answer 1

Prepare a comprehensive note on discovering the responsibility of financial management in promoting sustainable business practices and growth. 1) Ahmad has bought Apple stock which is expected to earn 20 % in a booming economy, 10 % in a normal economy, and lose 5 % in a recessionary economy. There is a 15 % probability of a boom and a 50 % chance of a normal economy. Determine your expected rate of return on this stock? 2) Continuing by means of above question, illustrate what would be the standard deviation of the Apple stock? 3) Describe the expected return on a portfolio that is invested 50 % in Apple Stock and the remainder in the Google? 4) If the correlation among prices of Bond A and B is 0.5, compute risk on the portfolio.