The stocks expected return, standard deviation, and coefficient of variation. Portfolio: It refers to a group of financial assets like bonds, stocks, and equivalents of cash. The portfolio is held by investors and financial users. A portfolio is constructed in accordance with the risk tolerance and the objectives of the company. Expected Return on Stock: The expected return on stock refers to the weighted average of expected returns on those assets , which are held in the portfolio. Standard Deviation: The standard deviation refers to the stand-alone risk associated with the securities. It measures how much a data is dispersed with its standard value. Sigma represents the standard deviation. Coefficient variation: The coefficient of variation is a tool to determine the risk. It determines the risk per unit of return. It is used for measurement, when the expected returns are same for two data.

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You want to buy equipment that is available from 2 companies. The price of the equipment is the same for both companies. Gray Media would let you make quarterly payments of $1,430 for 7 years at an interest rate of 1.59 percent per quarter. Your first payment to Gray Media would be today. River Media would let you make monthly payments of $X for 8 years at an interest rate of 1.46 percent per month. Your first payment to River Media would be in 1 month. What is X? Input instructions: Round your answer to the nearest dollar. 59

Answer 1

Question

Chapter 8, Problem 1P

Summary Introduction

To determine: The stocks expected return, standard deviation, and coefficient of variation.

Portfolio: It refers to a group of financial assets like bonds, stocks, and equivalents of cash. The portfolio is held by investors and financial users. A portfolio is constructed in accordance with the risk tolerance and the objectives of the company.

Expected Return on Stock: The expected return on stock refers to the weighted average of expected returns on those assets, which are held in the portfolio.

Standard Deviation: The standard deviation refers to the stand-alone risk associated with the securities. It measures how much a data is dispersed with its standard value. Sigma represents the standard deviation.

Coefficient variation: The coefficient of variation is a tool to determine the risk. It determines the risk per unit of return. It is used for measurement, when the expected returns are same for two data.

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