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Stron1 In determininga the level of risk for financial assets, when is the coefficient of variati...
8.2 The coefficient of variation is a better measure of stand-alone risk than standard deviation because...
8.2
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- 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- .. The Sharpe ratio compares the asset's realized excess return to its -Select- over a...
# "If the Inherent Risk level is: "And the Control Risk level is: What is the...
# "If the Inherent Risk level is: "And the Control Risk level is: What is the Residual Risk level? "Inherent Risk Level Question Control Question 1 High High ? "Provide an example of an account with a high inherent risk For this specific account and risk level, provide an example of an internal control with a high level of control risk 2 High Low ? "Provide an example of an account with a high inherent risk For this specific account...
Standard deviation versus coefficient of variation as measures of risk Greengage, Inc., a successful nursery, is...
Standard deviation versus coefficient of variation as measures of risk Greengage, Inc., a successful nursery, is considering several expansion projects. All of the alternatives promise to produce an acceptable return. Data on four possible projects appear in the following table ! a. Which project is least risky, judging on the basis of range? Data Table b. Which project has the lowest standard deviation? Explain why standard deviation may not be an entirely appropriate measure of risk for purposes of this...
EXTRA RISK PROBLEMS Stock A Stock B Expected Return 10% 1 Standard Deviation Beta Correlation coefficient with the...
EXTRA RISK PROBLEMS Stock A Stock B Expected Return 10% 1 Standard Deviation Beta Correlation coefficient with the Market Correlation coefficient with Stock B Risk free rate 25% Expected return on the Market 12% Standard deviation of the Market 18 1. What is the expected return on a portfolio comprised of $6000 of Stock A and S4000 of Stock B? 2. What is the Standard deviation of this portfolio? 3. Does it make sense to combine these two in this...
Question C2 (a) Onshore Bank has $20 million in assets, with risk-adjusted assets of $10 million....
Question C2 (a) Onshore Bank has $20 million in assets, with risk-adjusted assets of $10 million. CET1 capital is $500,000, additional Tier I capital is $50,000 and Tier II capital is $400,000. Calculate the new (1) amount of risk-adjusted assets, (2) CET1 risk-based ratio, (3) Tier I risk-based capital ratio and (4) total risk-based capital ratio after considering the following transactions separately. (i) The bank issues $2 million of Certificate of Deposits (CDs) and uses the proceeds to finance single...
EVALUATING RISK AND RETURN Stock X has a 10.5% expected return, a beta coefficient of 1.0,...
EVALUATING RISK AND RETURN Stock X has a 10.5% expected return, a beta coefficient of 1.0, and a 35% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 30.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. Cvx= ?Cvy=? C.Calculate each stock's required rate of return.Rx=?...
Digital Technology wishes to determine its coefficient of variation as a company over time. The firm...
Digital Technology wishes to determine its coefficient of variation as a company over time. The firm projects the following data (in millions of dollars): Standard Deviation $ 32 Profits: Year Expected Value $ 93 120 163 250 56 88 148 a. Compute the coefficient of variation (for each time period. (Round your answers to 3 decimal places.) Year Coefficient of Variation 6 b. Does the risk ( appear to be increasing over a period of time? Yes O No
QUESTION 28 The expected returns, standard deviation, and coefficient variation of Stocks A and B are...
QUESTION 28 The expected returns, standard deviation, and coefficient variation of Stocks A and B are given below. If you are risk adverse investor, which stock will you buy? | Stocks | Expected Return Std. Deviation Coefficient Variation, CV A 15% 4% 0.27 B 12% 3% 0.25 O Stock A since expected return is higher Stock B since standard deviation is lower O Stock A since coefficient variation is higher Stock B since coefficient variation is lower O Need additional...
In some reports, the mean and coefficient of variation are given. For instance, one report gives...
In some reports, the mean and coefficient of variation are given. For instance, one report gives the average number of physician visits by males per year. The average reported is 2.0, and the reported coefficient of variation is 2.3%. Use this information to determine the standard deviation of the annual number of visits to physicians made by males. (Round your answer to three decimal places.) How do I do this ?
EVALUATING RISK AND RETURN Stock X has a 9.5% expected return, a beta coefficient of 0.8,...
EVALUATING RISK AND RETURN Stock X has a 9.5% expected return, a beta coefficient of 0.8, and a 40% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 20.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. a. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CVx = ________ CVy = ________ b. Which...
8.2
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- 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- .. The Sharpe ratio compares the asset's realized excess return to its -Select- over a...
Standard deviation versus coefficient of variation as measures of risk Greengage, Inc., a successful nursery, is considering several expansion projects. All of the alternatives promise to produce an acceptable return. Data on four possible projects appear in the following table ! a. Which project is least risky, judging on the basis of range? Data Table b. Which project has the lowest standard deviation? Explain why standard deviation may not be an entirely appropriate measure of risk for purposes of this...
EXTRA RISK PROBLEMS Stock A Stock B Expected Return 10% 1 Standard Deviation Beta Correlation coefficient with the Market Correlation coefficient with Stock B Risk free rate 25% Expected return on the Market 12% Standard deviation of the Market 18 1. What is the expected return on a portfolio comprised of $6000 of Stock A and S4000 of Stock B? 2. What is the Standard deviation of this portfolio? 3. Does it make sense to combine these two in this...
Question C2 (a) Onshore Bank has $20 million in assets, with risk-adjusted assets of $10 million. CET1 capital is $500,000, additional Tier I capital is $50,000 and Tier II capital is $400,000. Calculate the new (1) amount of risk-adjusted assets, (2) CET1 risk-based ratio, (3) Tier I risk-based capital ratio and (4) total risk-based capital ratio after considering the following transactions separately. (i) The bank issues $2 million of Certificate of Deposits (CDs) and uses the proceeds to finance single...
Digital Technology wishes to determine its coefficient of variation as a company over time. The firm projects the following data (in millions of dollars): Standard Deviation $ 32 Profits: Year Expected Value $ 93 120 163 250 56 88 148 a. Compute the coefficient of variation (for each time period. (Round your answers to 3 decimal places.) Year Coefficient of Variation 6 b. Does the risk ( appear to be increasing over a period of time? Yes O No
QUESTION 28 The expected returns, standard deviation, and coefficient variation of Stocks A and B are given below. If you are risk adverse investor, which stock will you buy? | Stocks | Expected Return Std. Deviation Coefficient Variation, CV A 15% 4% 0.27 B 12% 3% 0.25 O Stock A since expected return is higher Stock B since standard deviation is lower O Stock A since coefficient variation is higher Stock B since coefficient variation is lower O Need additional...
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