1. A stock had returns of 10 percent, -6 percent, 6 percent, and 14 percent over the past four years. What is the standard deviation of these returns?
8.6 percent
8.1 percent
7.6 percent
7.2 percent
9.0 percent
2. P&G is an all equity firm that has 90,000 shares of stock outstanding. The company is in the process of borrowing $100,000 at 8 percent interest to repurchase 5,000 shares of the outstanding stock. What is the value of this firm if you ignore taxes?
A. $6.0 million
B. $2.5 million
C. $5.0 million
D. $1.8 million
E. $5.5 million