5Problem 13-6 (Algo) Coefficient of variation [LO13-1]Possible outcomes for three investment alternatives and their probabilities of occurrence are given next.FailureAcceptableeBookSuccessfulHintAlternative 1Outcomes30ProbabilityOutcomesAlternative 2ProbabilityAlternative 3Outcomes Probability0.20800.40900.40601200.201400.202250.400.602100.403800.20Using the coefficient of variation, rank the three alternatives in terms of risk from lowest to highest.Note: Do not round intermediate calculations. Round your answers to 3 decimal places.Coefficient ofVariationRankPrintAlternative 1Alternative 2Alternative 3References

Step 1:Given: Alternative 1Alternative 2Alternative 3…

Answered: 5 Problem 13-6 (Algo) Coefficient of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Possible outcomes for three investment alternatives and their probabilities of occurrence are given next. Failure Acceptable Successful Alternative 1 Alternative 2 Alternative 3 Outcomes Probability Outcomes Probability Outcomes Probability 50 0.40 70 0.20 85 0.40 0.20 130 0.40 325 0.40 0.40 265 0.40 410 0.20 Alternative 1 Alternative 2 Alternative 3 80 135 Using the coefficient of variation, rank the three alternatives in terms of risk from lowest to highest. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Coefficient of Variation Rank
Problem 13-6 (Algo) Coefficient of variation [LO13-1) Possible outcomes for three investment alternatives and their probabilities of occurrence are given next. Alternative 1 Alternative 2 Outcomes Probability Outcomes Probability 0.20 0.40 0.40 Failure Acceptable. Successful Alternative 1 Alternative 2 Alternative 31 50 80 120 Coefficient of Variation 8.20 0.40 0.40 Rank 98 185 205 Using the coefficient of variation, rank the three alternatives in terms of risk from lowest to highest. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. 2 Drau Alternative 3 Outcomes 65 320 420 5 of 9 Probability 8.20 0.60 0.20 # Next >
An investor is consider four different opportunities, A, B, C, or D. The payoff for each opportunity will depend on the economic conditions, represented in the payoff table below. Economic Condition Investment Poor Average Good Excellent (S1) (S2) (S3) (S4) A 50 75 20 30 B 80 15 40 50 C -100 300 -50 10 D 25 25 25 25 What decision would be made under minimax regret?
Question 4 (4 points) ◄ Listen The IRR of normal Project X is greater than the IRR of normal Project Y, and both IRRs are greater than zero. Also, the NPV of X is greater than the NPV of Y at the cost of capital. If the two projects are mutually exclusive, Project X should definitely be selected, and the investment made, provided we have confidence in the data. Put another way, it is impossible to draw NPV profiles that would suggest not accepting Project X. True False
Q4
39. Consider the following information. Assuming this represents the Population. Investment X 4% -10% 8% 8 Year 1 2 3 14% Investment Y -6% 8% 12% -2% Risk Free Rate: 2% The Covariance of Investment X and Investment Y is (Hint: Covariance = 1/nΣ(xi — Xavg)(yi - Yavg) A. -32.60 B. -21.00 C. +144.82 D. -103.50 E. +114.34
Rank the following risky investment projects based on stochastic dominance. Project P Project Q Payoff Probability Payoff Probability 20 0.3 30 0.25 40 0.4 50 0.25 70 0.2 60 0.25 80 0.1 90 0.25
Cash flows for 3 shopping center project is shown below, Apply quantitative techniques to forecast how long to pay back the original investment in each project - Accounting Rate of Return (ARR) and choose the best project. Year Handover Bristol Carlisle -4 -4 -5 2.5 1.5 2.5 2 0.5 2.5 0.5 0.5 0.5 1.5 3 Carlisle Average Value = Choose. : Carlisle ARR = Choose. The best project is Choose. Bristol Average Value = Choose. Handover Average Value = Choose. : Bristol ARR = Choose. Handover ARR= Choose...
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Option A В -А C-B C-A -4500 -7500 -9000 -3000 -1500 -4500 1500 3000 3400 1500 400 1900 2. 2000 3000 3740 1000 740 1740 3 2500 3000 4114 50 1114 1614 8/C or AB/C 0.91 1.18 1.07 1.11 1.31 1.04 Your accountant has provided you with the table below comparing three alternatives using benefit-cost ratio analysis and an MARR of 6%, the best option is: Option A Option B O Option C There is not enough information provided. Year

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