Standard deviation is Group of answer choices a measure of the variation of possible rates of return from the expected rate of return the square root of the mean estimates the extent by which a random variable varies from its mean. measures the strength of returns of a particular asset.

Standard deviation is Group of answer choices a measure of the variation of possible rates of return from the expected rate of return the square root of the mean estimates the extent by which a random variable varies from its mean. measures the strength of returns of a particular asset.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter6: Risk And Return

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Overview In this activity, you will complete calculations and research that will help you understand…

A: Steps to Calculate the Present Value (PV) of Lottery Installments:Formula:PV=Pmt×(1−(1+r)−n)/rPV =…

Q: prd.2

A: Part 1: How much do you need in your investment account when you retire?We are using the Present…

Q: an

A: First, we need to calculate the dividends for the first six years. The dividends are growing at a…

Q: What is the present value of having a cash flow of 25000 dollars if the interest rate is 16%

A: The present value (PV) is the current worth of a future sum of money or stream of cash flows given a…

Q: Silver Limited, a producer of electricity using biomass, issued 15,000 bonds three years ago with…

A: Here's a detailed explanation for better understanding. Stage 1: Calculating Dividends for the First…

Q: What are the benefits of ERM compared to regular insurance?

A: Approach to solving the question:Freeform Detailed explanation: 1. Holistic Risk Assessment: The…

Q: prd

A: Step 1: Write down the formulaPresent Value (P0) = (Expected Dividend (D1) + Expected Price (P1)) /…

Q: QUESTION THREE a. 'We all know maths; GH¢4.20-GH¢5 is 19% depreciation, not 6%- an MP to government.…

A: Part A: Depreciation of the CediThe MP argues that the cedi has depreciated by 19%, which is higher…

Q: Kelly is a 20% partner in KMJ, LLC. She receive a current distribution of $200 cash that reduces her…

A: Step 1: Determine the reduction in Kelly's share of partnership liabilities:Initial share of debt:…

Q: A company's dividend yield is 3% and its stock is trading at $80 per share. What is the annual…

A: Explanation of Dividend Yield: This is a financial ratio that shows how much a company pays out in…

Q: Suppose Walmart has mean 5% and standard deviation 10%, and Tesla has mean 20%. The risk-free rate…

A: (c) Investor 1's optimal portfolio has mean 16.5% and standard deviation 25%. Investor 2's optimal…

Q: please help me

A: Step 1: Step 2: Step 3: Step 4:

Q: Question 1: 6 marks Company A can borrow money at a fixed rate of 9 percent or a variable rate set…

A: Part ii) Structuring the Swap to Benefit Both Companies and the Swap Dealer Step 1: Define Each…

Q: What is dividend policy? Discuss the factors that influence a company's dividend policy. What are…

A: Explanation of Dividend Irrelevance Theory: This theory, proposed by Miller and Modigliani, suggests…

Q: Please correct answer and don't use hand rating

A: To determine the NPV of the project, we first calculated the project's Weighted Average Cost of…

Q: Shoe Shine has proposed a reorganization plan based on a going-concern value of $1.3 million after…

A: In a reorganization plan, the company's assets are valued and then distributed to the creditors…

Q: Please correct answer and don't use hand rating

A: Samuel Jenkins has made two investments: one held for 14 months and another held for 2 months. He…

Q: calculate cash flow to creditots for FY24

A: Calculation to find cash flow to the creditors break each step from the provided income statement…

Q: Find the EAR in each of the following cases. (Use 365 days a year. Do not round intermediate…

A: The Effective Annual Rate (EAR) is the actual interest rate earned or paid on an investment, loan or…

Q: H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed…

A: Given Information:Initial investment: $2.15 million.Project lifespan: 3 years.Annual sales: $2.23…

Q: Draw a graph of return on y axis and standard deviation on x-axis

Q: Kaleidescope Entertainment is considering buying a machine that costs $554,000. The machine will be…

A: Step 1: Step 2: Step 3: Step 4:

Q: ANALI

A: Step 3: Calculating Present Worth of Each Cash Flow SeriesPresent Worth of First Cash Flow SeriesThe…

Q: You need to have $34,250 in 17 years. You can earn an annual interest rate of 4 percent for the…

A: ConclusionWhen dealing with varying interest rates over different periods, it's essential to…

Q: NovaStar Co. has expansion opportunities. Its board of directors has determined that it can manage…

A: (Image 1)(Image 2)(Image 3) Explanation:To determine the present value of NovaStar Co.'s bond coupon…

Q: Please correct answer and don't use hand rating

Q: General finance Expert

A: Explanation of Principal (P):This is the initial deposit or the starting amount of money that is…

Q: Question 11 Economic condition Probability Returns Economic boom 0.20 16% Economic growth 0.40 12%…

A: Step 1: ( If you have any questions related to this problem please feel free to ask me)

Q: Please correct answer and don't use hand rating

A: Calculating Principal Repayment on 30-Year MortgageIntroduction:To find out how much principal you…

Q: In general finance, what is the term used to describe the interest earned on both the initial…

A: Explanation of Simple Interest: Simple interest is the interest calculated only on the initial…

Q: FreeMan Enterprise Calculate the Payback Period of both machines. (Answers must be expresses in…

A: Freeman Enterprise Investment Analysis SummaryPayback Period:Machine A and Machine B do not achieve…

Q: Please can you provide a visual illustration

A: Analytical Flow Chart

Q: Ans

A: Step 1:

Q: General finance

A: Step 1: Define Balance SheetThe creation of a balance sheet or statement of financial position helps…

Q: MC algo 5-11 Calculating Future Values You are going to deposit $19,000 today. You will earn an…

A: Here's the step-by-step solution:1. Initial Deposit (Principal): $19,0002. First Period:Annual…

Q: There are five possible procedures for valuing real options: (1) DCF analysis only and ignore the…

A: A Comparison of the Five Methods for Real Option ValuationBusinesses are able to assess…

Q: Provide correct answer for this finance question

A: Step 1: Defined benefit retirement planThe plan renders the benefits to the employees after their…

Q: What is the primary purpose of diversification in an investment portfolio in General? a) To…

A: Explanation of Diversification:Diversification is an investment strategy that involves spreading…

Q: Please correct answer and don't use hand raiting and don't use Ai solution

A: The problem involves the determination of the NPV or the net present value. NPV pertains to the…

Q: What is the present value of $1,200 to be received in 2 years if the discount rate is 8%? (General…

A: Step 1: Step 2: Step 3: Step 4:

Q: Use the following selected financial information for Cooler Company to answer the question: Net…

A: Return on Equity (ROE) is a measure of financial performance calculated by dividing net income by…

Q: 5-5: Currently, a one-year Treasury bill is yielding 3.2 percent. Company F's three-year bond has a…

A: (a) Maturity Risk Premium (MRP):To find the MRP, we can use the difference in yields between bonds…

Q: Please correct answer and don't use hand raiting

A: y=61x+4for the intersection point on the x-axis., putting y=0 in the given equation givesx=−24for…

Q: I need help to see how I would get the capital expenditures for year 3, (520,387). I don't…

A: 1. Initial Equipment Cost:When you acquire the new equipment, you have an initial cost of…

Q: Ans

A: Option A: This option is incorrect because it implies that future returns can be predicted with…

Q: Discuss concisely some dilemmas that multinational firms and their foreign affiliates may face…

A: When it comes to debt ratio restrictions and dividend payments, multinational corporations and their…

Q: Compare pros and cons of equity and debt. Then, discuss major methods of recapitalization used when…

A: Detailed explanation: Equity FinancingPros:• No repayment obligation; reduces financial strain.• No…

Q: Please correct answer and don't use hand raiting

A: Now that we have the growth rate, we can plug it into the horizon value formula: Horizon…

Q: What does beta measure?

A: Explanation of Capital Asset Pricing Model (CAPM):The Capital Asset Pricing Model (CAPM) is a…

Q: Determine the price of an 8 percent coupon rate bond, making semi-annual payments with a 9 year…

A: Step 1: Adjust for Semi-Annual PaymentsSince the bond pays interest semi-annually, we first split…

Question

Standard deviation is

Group of answer choices

a measure of the variation of possible rates of return from the expected rate of return

the square root of the mean

estimates the extent by which a random variable varies from its mean.

measures the strength of returns of a particular asset.

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

The expected return for an individual asset is the sum of expected returns in each state of the world multiplied by the probability of each state of the world occurring. Group of answer choices True False
How is the standard deviation of returns calculated?
How is CAPM, Sharpe ratio, Treynor measures and Jensen’s Alpha used to Evaluate asset returns?
The following provides information regarding Assets X and Y. Calculate the expected rate of return, variance, standard deviation, and coefficient of variation for the two assets. Which asset is a better investment?
The expected value, standard deviation of returns, and coefficient o below.) \table[[Asset A],[Possible Outcomes,Probability,Returns (%)
A plot/graph of the positive relation between systematic risk and expected return is called: O security market line standard deviation and width of the normal distribution O covariance graph O capital asset pricing model
Which of the following is a justification framework for the mean-variance approach? a)if trading is continuous and asset prices follow a multi-dimensional geometric Brownian motion with drift.b)If the investors’ state-specific utility is an exponential function of the assets variance. c)If investors’ preferences for risk are inter-dependent and serially correlated with asset returns.d)If the returns of all assets follow the Mandelbrot distribution.
Expected return and standard deviation. Use the following information to answer the questions. State of Economy Probability of State Return on Asset D in State Return on Asset E in State Return on Asset F in State Boom 0.34 0.08 0.29 0.19 Normal 0.55 0.08 0.17 0.11 Recession 0.11 0.08 −0.24 −0.09 a. What is the expected return of each asset? b. What is the variance of each asset? c. What is the standard deviation of each asset? Hint: Make sure to round all intermediate calculations to at least seven (7) decimal places. The input instructions, phrases in parenthesis after each answer box, only apply for the answers you will type. a. What is the expected return of asset D? (Round to four decimal places.) What is the expected return of asset E? (Round to four decimal places.) What is the expected return of asset F?…
Assuming that the rates of return associated with a given asset investment are normally distributed; that the expected return, r, is 18.7%; and that the coefficient of variation, CV, is 1.88, answer the following questions: a. Find the standard deviation of returns, sigma Subscript rσr. b. Calculate the range of expected return outcomes associated with the following probabilities of occurrence: (1) 68%, (2) 95%, (3) 99%.
What is the formula to find an expected in returns in CAPM
Suppose the gain from an investment is a normal random variable with mean 2 and standard deviation1.25. Compute the VaR for this investment.
Supposing the return from an investment has the following probability distribution Return Probability R (%) 8 0.2 10 0.2 12 0.5 14 0.1 Required: What is the expected return of the investment? What is the risk as measured by the standard deviation of expected returns?