Tasks Investments
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Task 1.
There are three projects A, B and C, the initial cost of which and the planned income streams by year are shown in the table:
Project С0 С1 С2 С3
A 120 60 40 80
B 130 70 40 70
C 140 80 30 60
Let the assumed implementation period of each project be 2.5 years, and the discount rate is estimated at 15 per annum. Select a project using the payback period rule. Justify your answer.
Task 2.
The investor is trying to evaluate various options for changing the economic situation and how this may affect the profitability of the stock being valued:
options Probability of option, Pt Estimated return, rt
A 0.10 0.08
B 0.15 0.12
C 0.25 0.15
D 0.30 0.18
E 0.15 0.12
F 0.05 0.05
What is the expected return on such a stock?
Task 3.
There are three stocks A, B and C for which the expected return is calculated:
E(ra)=0.11; E(rb)=0.12; E(rc)=0.14
And the standard deviations of the return rates: σа=0.02; σv=0.03; σc=0.04
Which stock is better to invest in and why?
There are three projects A, B and C, the initial cost of which and the planned income streams by year are shown in the table:
Project С0 С1 С2 С3
A 120 60 40 80
B 130 70 40 70
C 140 80 30 60
Let the assumed implementation period of each project be 2.5 years, and the discount rate is estimated at 15 per annum. Select a project using the payback period rule. Justify your answer.
Task 2.
The investor is trying to evaluate various options for changing the economic situation and how this may affect the profitability of the stock being valued:
options Probability of option, Pt Estimated return, rt
A 0.10 0.08
B 0.15 0.12
C 0.25 0.15
D 0.30 0.18
E 0.15 0.12
F 0.05 0.05
What is the expected return on such a stock?
Task 3.
There are three stocks A, B and C for which the expected return is calculated:
E(ra)=0.11; E(rb)=0.12; E(rc)=0.14
And the standard deviations of the return rates: σа=0.02; σv=0.03; σc=0.04
Which stock is better to invest in and why?
Tasks Investments
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