subject
Business, 14.03.2020 03:28 eviepack

Stand-alone risk is the risk an investor would face if he or she held only -Select-one portfolioone assetmultiple assetsCorrect 1 of Item 1. No investment should be undertaken unless its expected rate of return is high enough to compensate for its perceived -Select-riskcostreturnCorrect 2 of Item 1. The expected rate of return is the return expected to be realized from an investment; it is calculated as the -Select-combined sumstandard deviationweighted averageCorrect 3 of Item 1 of the probability distribution of possible results as shown below:The -Select- 4 of Item 1 an asset's probability distribution, the lower its risk. Two useful measures of stand-alone risk are standard deviation and coefficient of variation. Standard deviation is a statistical measure of the variability of a set of observations as shown below:If you have a sample of actual historical data, then the standard deviation calculation would be changed as follows:The coefficient of variation is a better measure of stand-alone risk than standard deviation because it is a standardized measure of risk per unit; it is calculated as the -Select-correlation coefficientrisk premiumstandard deviationCorrect 5 of Item 1 divided by the expected return. The coefficient of variation shows the risk per unit of return, so it provides a more meaningful risk measure when the expected returns on two alternatives are not -Select- 6 of Item 1.Quantitative Problem: You are given the following probability distribution for CHC Enterprises:State of Economy Probability Rate of return Strong 0.2 19% Normal 0.55 8% Weak 0.25 -4%What is the stock's expected return? Round your answer to 2 decimal places. Do not round intermediate calculations.%What is the stock's standard deviation? Round your answer to two decimal places. Do not round intermediate calculations.%What is the stock's coefficient of variation? Round your answer to two decimal places. Do not round intermediate calculations.

ansver
Answers: 3

Another question on Business

question
Business, 22.06.2019 10:40
Two assets have the following expected returns and standard deviations when the risk-free rate is 5%: asset a e(ra) = 18.5% σa = 20% asset b e(rb) = 15% σb = 27% an investor with a risk aversion of a = 3 would find that on a risk-return basis. a. only asset a is acceptable b. only asset b is acceptable c. neither asset a nor asset b is acceptable d. both asset a and asset b are acceptable
Answers: 2
question
Business, 22.06.2019 15:20
Record the journal entry for the provision for uncollectible accounts under each of the following independent assumptions: a. the allowance for doubtful accounts before adjustment has a credit balance of $500. b. the allowance for doubtful accounts before adjustment has a debit balance of $250. c. assume that octoberʼs credit sales were $70,000. uncollectible accounts expense is estimated at 2% of sales. smith, gaylord n.. excel applications for accounting principles (p. 51). cengage textbook. kindle edition.
Answers: 1
question
Business, 22.06.2019 17:00
Afinancing project has an initial cash inflow of $42,000 and cash flows of −$15,600, −$22,200, and −$18,000 for years 1 to 3, respectively. the required rate of return is 13 percent. what is the internal rate of return? should the project be accepted?
Answers: 1
question
Business, 22.06.2019 17:30
The purchasing agent for a company that assembles and sells air-conditioning equipment in a latin american country noted that the cost of compressors has increased significantly each time they have been reordered. the company uses an eoq model to determine order size. what are the implications of this price escalation with respect to order size? what factors other than price must be taken into consideration?
Answers: 1
You know the right answer?
Stand-alone risk is the risk an investor would face if he or she held only -Select-one portfolioone...
Questions
Questions on the website: 13722365