Solution
Question # 1:
Ans (a): 1st we find out the " Expected Value "
| X | P ( x ) | X . P (x) |
| 350 | 0.3 | 350 x 0.3 = 105 |
| 250 | 0.6 | 250 x 0.6 = 150 |
| 150 | 0.1 | 150 x 0.1 = 15 |
|
|
| ∑ X. P(x) = 270 |
Expected Value: 270 [ Req. (a) ]
Ans (b): 2nd we find out the "Variance"
| X | P ( x ) | X2 | X2.P (x) |
| 350 | 0.3 | 122500 | 36750 |
| 250 | 0.6 | 62500 | 37500 |
| 150 | 0.1 | 22500 | 2250 |
|
|
|
| ∑ X2. P(x) = 76500 |
Variance : ∑ X2. P(x) – (270)2
= 76500 – 72900
= 3600
Ans (c): 3rd we find out the "Standard Deviation"
√3600 = 60
 |
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Solution
Question # 2:
Ans:
Dividend = 4
R = 18 % => 0.18
G = 8% => 0.08
Current Price/ Present Price (PV) =?
As we know :
PV = Dividend. / r - g
= 4/ 0.18 – 0.08
= 4/0.1
= 40 Current Price
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