a)
To discuss:
Range of return, average return, standard deviation and coefficient of variation.
Introduction:
Return: In financial context, return is seen as percentage that represents the profit in an investment.
The standard deviation measures the volatility of the stock. It measures in absolute terms the dispersion of asset risk around its mean.
The coefficient of variation is an asset risk indicator that measures the relative dispersion. It describes the volatility of asset returns relative to its mean or expected return.
b)
To discuss:
Bar chart distribution.
Introduction:
Return: In financial context, return is seen as percentage that represents the profit in an investment.
c)
To determine:
Relative riskiness
Introduction:
Risk: The risk can be defined as the uncertainty attached to an event such as investment where there is some amount of risk associated to it as there can be either gain or loss.
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Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
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- please colud you explain me what how you using calculator or computation to determine NPV or IRR. A firm has the following investment alternatives: Year A B C 1 $400 $--- $-- 2 400 400 --- 3 400 800 --- 4 400 800 1,800 Each investment costs $1,400, and the firm's cost of capital is 10 percent. a. What is each investment's internal rate of return? b. Should the firm make any of these investment? c. What is each investment's net present value? d. Should the firm firm make any of these investments?arrow_forwardMc Graw Hill Risk and Capital Budgeting AA Fill in the blank: Scenario analysis is made up of several Correct Michael Scenarios Michael We have created various scenarios each with a forecast for our expected sales volume, revenues, expenses, risks, etc. At a high level, here are how each of the scenarios looks like. Calculate NPV for Scenario A. Use the information provided on the right. Round to the nearest whole number. Submit Enter a response then click Submit below $0 Scenarios Area 1.1 Scenario Comparison ($) Scenario A Scenario B Scenario C Initial Investment 2,000,000 2,000,000 2,000,000 Expected interest rate: 12% Forecasting period: 5 years PV annuity factor: 3.6048 Annual Net Income 545, 100 426,995 1,644,385 Annual Cash Flow 656,890 -493, 005 2,564,385 NPV -3,777, 184 7,244,095 Return to Activity Score Materialsarrow_forwardA large decision tree has an outcome branch detailed below. If decisions D1, D2, and D3 are all options in a 1-year time-period, find the decision path that maximizes the outcome value. There are specific dollar investments necessary for decision nodes D1, D2 and D3,a s indicated on each branch D2 Investment $-50 D1 $-80 $-25 $-30 $-35 0.9 0.1 0.3 0.3 0.4 0.5 0.5 D3 Value, $ 150 -30 75 200 -100 50 0.4 0.6 Value, $ 30 100 -50 500 90arrow_forward
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