Author Question: The stock for L-Corp expects a 12% return in a down economy, 15% in a normal economy, and 20% in a ... (Read 43 times)

misspop · **on:** Apr 25, 2021

Question 1

Suppose you paid $18.50 per share for Commerce Group Inc. common stock and sold it one year later for $24 per share. What was your holding period return if the stock paid no dividends during the year?
◦ 27%
◦ 13%
◦ 23%
◦ 32%
◦ 30%

Question 2

The stock for L-Corp expects a 12% return in a down economy, 15% in a normal economy, and 20% in a booming economy. What is the expected return if there is a 20% chance for a down economy and a 65% chance for a normal economy?
◦ 13.05%
◦ 15.00%
◦ 15.15%
◦ 15.55%
◦ 14.25%

bdobbins · **Reply #1 on:** Apr 25, 2021

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