What common stocks will be tripling in price the next month or so? And why? The more stocks the better please.
Answers: epr - real strong grower
lcav - unlimited up potential
jbx - hot to trot
msft - in it to win it
nova - too legit to quit
Tripling in value ?
One month ?
Where did you hide the camera ?
Invalid IRR?
e.g we have Cash Flow as below:-3; -2; -2; -2
=> NPV<0 at any discount rate => IRR doesn't exist?
Of course this is a unpromising proposition and IRR doesn't make a sense but when we own several scenarios as below:
Cash Flow:
-3; 4; 5; 6 (probability=80%)
-3; -2; -2; -2 (probability=20%)
=> we hold to calculate Expected Value of IRR but how to figure IRR in the 2nd scenario?
Answers: You are right that the NPV of the stream of cashflows {-3; -2; -2; -2} cannot be nothing at any discount rate >0 or =0.
But, the NPV can be 0 at a discount rate that is cynical. You will say how can the discount rate can be glum? I am not suggesting that a choose a negative discount rate to total NPV. But, if the NPV is 0 at a negative discount rate, it channel that the project as represented by the cashdlows {-3; -2; -2; -2} has a distrustful IRR. That is only measurable. The all denial cashflows imply a gloomy return on the initial cashoutflow of 3. (remember, I had contained by reply to your earlier query, suggested that IRR is a higher plane concept of ROR!). So, take your cashflows {-3; -2; -2; -2} and use a discount rate of -183% or discount factor of -12, you will capture the NPV close to zero. So, you indeed own a negative IRR of -183% near probability of 0.2
The other cashflow stream {-3; 4; 5; 6 } has a unbelievably high positive IRR beside a probability of 0.8.
So, now you can work out the expected value of IRR.
Notes:
1. It is outstandingly unlikely that you take up a project that will yied denial cash flows adjectives through its life. There must be some agency to terminate the project and avoid the third and fourth glum cashflows from occuring unless its a penalty type of event near 20% probability.
2. Also, normally one would expect cashflows of respectively year to have alternative values near probabilities. Like this[ (-3 with p=1), (-2 beside p=0.8 and 4 with p=0.8}, (-2 next to p=0.2 and 5 with p=0.8), (-2 next to p=02 and 6 with p=0.8)] whre p=probability. In this crust, you first find the expected value of bread flows in successibve period and then work out the NPV or the IRR.
3. You give the impression of being to be fascinated by NPV and IRR etc. Your questioning mind will give a hand you master the subject. Good Luck. But the teachers must answer these question in the course of culture in the class.They are the best to communicate face-to-face properly. Our answers may not be capable of clarify all your doubrs as they arise.
IRR is created using a method call a Newton Estimate. There is no way to truly calculate IRR directly. For the method to work at least possible one sign must be different within the sequence. For every sign change, however, you create a tentative root and so you could have several possible IRR's and you would hold to manually confirm which one is correct.
You have to combine these two scenario by multiplying the first by .8 and the second by .2 to determine the expected cash flows. This problem is next solvable.
In Futures trading, what is a 'stop order', 'aim order'?
Pls provide examplesAnswers: A stop order is an lay down triggered when the last price go through the stop price. For instance, a sell stop will trigger a souk sell instruct if the price hits it on the way down. A buy stop will trigger a open market buy if the price hits it going up.
A limit direct is when you bid to buy or offer to vend a contract. If you bid lower than the current offer contained by the market, or proposition higher than the current bid contained by the market, afterwards no transaction occurs at that moment. However, if you verbs to be the lowest offer or greatest bid, then the subsequent market establish in the souk will hit your bid or offer. The alternative is that you buy or flog at the market, but you will earnings the bid-offer spread in exchange for on the spot execution.
In other words, a limit command puts your order within a "stack" so that if the price moves to you, your order can capture executed. Its a way of achieve price improvement as all right as certainty contained by knowing what your execution price will be if it occurs.
Limit demand
An order that might read: 'Buy 10 June BAB at 93.00', consequence a client is willing to earnings no more than 93.00 for the June bank bill contracts. The lay down can be executed at a price below that, but if the price were a mere few points above, the broker would contact the client to check if he or she is allowed a few points scope and, if so, would execute the trade. A buy order is a buy cut-off date order when the constrain price is below the current market price. A provide limit is a restrain order when the constraint price is above the current market price. If you want to buy at a price above the current souk price or sell at a price explicitly below the current market price, you would create a "stop" direct.
stop order is an command to buy or sell futures when the price go to a certain price.
closing date order is an direct to buy or sell futures at a in no doubt price or better.
e.g. current price : 100
buy limit proclaim at 95 : order to buy at 95 or lower
buy stop command at 105 : order to buy after the price crosses 105 at souk price