Expected rate of return is the anticipated profit or loss of an investment to be received by the investor. It is computed by expecting the probabilities of a maximum range of returns on an investment. Standard deviation is the financial measure of risk and stability on the investment returns. Coefficient of variance is a measure used to calculate the total risk per unit of return of an investment.

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Answer 1

Question

Chapter 8, Problem 1PROB

Summary Introduction

Expected rate of return is the anticipated profit or loss of an investment to be received by the investor. It is computed by expecting the probabilities of a maximum range of returns on an investment.

Standard deviation is the financial measure of risk and stability on the investment returns.

Coefficient of variance is a measure used to calculate the total risk per unit of return of an investment.

Expert Solution & Answer

Explanation of Solution

Calculate the expected return as follows:

Expected return=[Probability×Payoff] =(0.2×19%)+(0.7×9%)+(0.1×4%) =3.8%+6.3%+0.4% =10.5%

Therefore, the expected return is 10.5%.

Calculate the standard deviation as follows:

Standard deviation=∑Probability×(Payoff−Expected return)2=(0.2×(19%−10.5%)2)+(0.7×(9%−10.5%)2)+(0.1×(4%−10.5%)2) =(0.2×(8.5%)2)+(0.7×(−1.5%)2)+(0.1×(−6.5%)2) =(0.2×72.25%)+(0.7×2.25%)+(0.1×42.25%)=14.45%+1.575%+4.225% =20.25% =4.5%

Therefore, the standard deviation is 4.5%.

Calculate the coefficient of variance as follows:

Coefficient of variance=Standard deviationExpected return =4.5%10.5% =0.429 or 4.29%

Therefore, the coefficient of variance is 4.29%.

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Scenario three: If a portfolio has a positive investment in every asset, can the expected return on a portfolio be greater than that of every asset in the portfolio? Can it be less than that of every asset in the portfolio? If you answer yes to one of both of these questions, explain and give an example for your answer(s). Please Provide a Reference

Hello expert Give the answer please general accounting

Scenario 2: The homepage for Coca-Cola Company can be found at coca-cola.com Links to an external site.. Locate the most recent annual report, which contains a balance sheet for the company. What is the book value of equity for Coca-Cola? The market value of a company is (# of shares of stock outstanding multiplied by the price per share). This information can be found at www.finance.yahoo.com Links to an external site., using the ticker symbol for Coca-Cola (KO). What is the market value of equity? Which number is more relevant to shareholders – the book value of equity or the market value of equity?

Answer 2

Question

Chapter 8, Problem 1PROB

Summary Introduction

Expected rate of return is the anticipated profit or loss of an investment to be received by the investor. It is computed by expecting the probabilities of a maximum range of returns on an investment.

Standard deviation is the financial measure of risk and stability on the investment returns.

Coefficient of variance is a measure used to calculate the total risk per unit of return of an investment.

Expert Solution & Answer

Explanation of Solution

Calculate the expected return as follows:

Expected return=[Probability×Payoff] =(0.2×19%)+(0.7×9%)+(0.1×4%) =3.8%+6.3%+0.4% =10.5%

Therefore, the expected return is 10.5%.

Calculate the standard deviation as follows:

Standard deviation=∑Probability×(Payoff−Expected return)2=(0.2×(19%−10.5%)2)+(0.7×(9%−10.5%)2)+(0.1×(4%−10.5%)2) =(0.2×(8.5%)2)+(0.7×(−1.5%)2)+(0.1×(−6.5%)2) =(0.2×72.25%)+(0.7×2.25%)+(0.1×42.25%)=14.45%+1.575%+4.225% =20.25% =4.5%

Therefore, the standard deviation is 4.5%.

Calculate the coefficient of variance as follows:

Coefficient of variance=Standard deviationExpected return =4.5%10.5% =0.429 or 4.29%

Therefore, the coefficient of variance is 4.29%.

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Answer 3

Question

Chapter 8, Problem 1PROB

Summary Introduction

Expected rate of return is the anticipated profit or loss of an investment to be received by the investor. It is computed by expecting the probabilities of a maximum range of returns on an investment.

Standard deviation is the financial measure of risk and stability on the investment returns.

Coefficient of variance is a measure used to calculate the total risk per unit of return of an investment.

Expert Solution & Answer

Explanation of Solution

Calculate the expected return as follows:

Expected return=[Probability×Payoff] =(0.2×19%)+(0.7×9%)+(0.1×4%) =3.8%+6.3%+0.4% =10.5%

Therefore, the expected return is 10.5%.

Calculate the standard deviation as follows:

Standard deviation=∑Probability×(Payoff−Expected return)2=(0.2×(19%−10.5%)2)+(0.7×(9%−10.5%)2)+(0.1×(4%−10.5%)2) =(0.2×(8.5%)2)+(0.7×(−1.5%)2)+(0.1×(−6.5%)2) =(0.2×72.25%)+(0.7×2.25%)+(0.1×42.25%)=14.45%+1.575%+4.225% =20.25% =4.5%

Therefore, the standard deviation is 4.5%.

Calculate the coefficient of variance as follows:

Coefficient of variance=Standard deviationExpected return =4.5%10.5% =0.429 or 4.29%

Therefore, the coefficient of variance is 4.29%.

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Answer 4

Question

Chapter 8, Problem 1PROB

Summary Introduction

Expected rate of return is the anticipated profit or loss of an investment to be received by the investor. It is computed by expecting the probabilities of a maximum range of returns on an investment.

Standard deviation is the financial measure of risk and stability on the investment returns.

Coefficient of variance is a measure used to calculate the total risk per unit of return of an investment.

Expert Solution & Answer

Explanation of Solution

Calculate the expected return as follows:

Expected return=[Probability×Payoff] =(0.2×19%)+(0.7×9%)+(0.1×4%) =3.8%+6.3%+0.4% =10.5%

Therefore, the expected return is 10.5%.

Calculate the standard deviation as follows:

Standard deviation=∑Probability×(Payoff−Expected return)2=(0.2×(19%−10.5%)2)+(0.7×(9%−10.5%)2)+(0.1×(4%−10.5%)2) =(0.2×(8.5%)2)+(0.7×(−1.5%)2)+(0.1×(−6.5%)2) =(0.2×72.25%)+(0.7×2.25%)+(0.1×42.25%)=14.45%+1.575%+4.225% =20.25% =4.5%

Therefore, the standard deviation is 4.5%.

Calculate the coefficient of variance as follows:

Coefficient of variance=Standard deviationExpected return =4.5%10.5% =0.429 or 4.29%

Therefore, the coefficient of variance is 4.29%.

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Answer 5

Chapter 8, Problem 1PROB

Summary Introduction

Expected rate of return is the anticipated profit or loss of an investment to be received by the investor. It is computed by expecting the probabilities of a maximum range of returns on an investment.

Standard deviation is the financial measure of risk and stability on the investment returns.

Coefficient of variance is a measure used to calculate the total risk per unit of return of an investment.

Expert Solution & Answer

Explanation of Solution

Calculate the expected return as follows:

Expected return=[Probability×Payoff] =(0.2×19%)+(0.7×9%)+(0.1×4%) =3.8%+6.3%+0.4% =10.5%

Therefore, the expected return is 10.5%.

Calculate the standard deviation as follows:

Standard deviation=∑Probability×(Payoff−Expected return)2=(0.2×(19%−10.5%)2)+(0.7×(9%−10.5%)2)+(0.1×(4%−10.5%)2) =(0.2×(8.5%)2)+(0.7×(−1.5%)2)+(0.1×(−6.5%)2) =(0.2×72.25%)+(0.7×2.25%)+(0.1×42.25%)=14.45%+1.575%+4.225% =20.25% =4.5%

Therefore, the standard deviation is 4.5%.

Calculate the coefficient of variance as follows:

Coefficient of variance=Standard deviationExpected return =4.5%10.5% =0.429 or 4.29%

Therefore, the coefficient of variance is 4.29%.

Answer 6

Chapter 8, Problem 1PROB

Summary Introduction

Expected rate of return is the anticipated profit or loss of an investment to be received by the investor. It is computed by expecting the probabilities of a maximum range of returns on an investment.

Standard deviation is the financial measure of risk and stability on the investment returns.

Coefficient of variance is a measure used to calculate the total risk per unit of return of an investment.

Expert Solution & Answer

Explanation of Solution

Calculate the expected return as follows:

Expected return=[Probability×Payoff] =(0.2×19%)+(0.7×9%)+(0.1×4%) =3.8%+6.3%+0.4% =10.5%

Therefore, the expected return is 10.5%.

Calculate the standard deviation as follows:

Standard deviation=∑Probability×(Payoff−Expected return)2=(0.2×(19%−10.5%)2)+(0.7×(9%−10.5%)2)+(0.1×(4%−10.5%)2) =(0.2×(8.5%)2)+(0.7×(−1.5%)2)+(0.1×(−6.5%)2) =(0.2×72.25%)+(0.7×2.25%)+(0.1×42.25%)=14.45%+1.575%+4.225% =20.25% =4.5%

Therefore, the standard deviation is 4.5%.

Calculate the coefficient of variance as follows:

Coefficient of variance=Standard deviationExpected return =4.5%10.5% =0.429 or 4.29%

Therefore, the coefficient of variance is 4.29%.

Answer 7

Chapter 8, Problem 1PROB

Summary Introduction

Expected rate of return is the anticipated profit or loss of an investment to be received by the investor. It is computed by expecting the probabilities of a maximum range of returns on an investment.

Standard deviation is the financial measure of risk and stability on the investment returns.

Coefficient of variance is a measure used to calculate the total risk per unit of return of an investment.

Answer 8

Expert Solution & Answer

Explanation of Solution

Calculate the expected return as follows:

Expected return=[Probability×Payoff] =(0.2×19%)+(0.7×9%)+(0.1×4%) =3.8%+6.3%+0.4% =10.5%

Therefore, the expected return is 10.5%.

Calculate the standard deviation as follows:

Standard deviation=∑Probability×(Payoff−Expected return)2=(0.2×(19%−10.5%)2)+(0.7×(9%−10.5%)2)+(0.1×(4%−10.5%)2) =(0.2×(8.5%)2)+(0.7×(−1.5%)2)+(0.1×(−6.5%)2) =(0.2×72.25%)+(0.7×2.25%)+(0.1×42.25%)=14.45%+1.575%+4.225% =20.25% =4.5%