The following information relates to Oman Telecommunications Company’s stock. Economic state Probability Return Prosperous 20% 30% Standard 50% 10% Decline 20% (10%) Recession 10 % (30%)
Instructions: a. Appraise Oman Telecommunications’ expected return. 10 marks b. Assess the risk of Oman Telecommunications’ stock. 5 marks c. If investment in Oman Cables is expected to have a return of 10% and estimated risk of 5%, explain which company would be a better investment opportunity; Oman Tel or Oman Cables?