Compute the investments expected return

Assignment Help Finance Basics

Reference no: EM1351891

1. (Expected Rate of Return and Risk) B. J. Orange Enterprises is evaluating a security. One-year Treasury bills are currently paying 1.9 percent (with little risk - 1 percent). Calculate the investment's expected return and its standard deviation. Should Orange invest in this security or the Treasury bills? You should calculate the expected return, standard deviation, and coefficient of variation.
Probability Return
.15 6%
.30 5%
.40 11%
.15 14%

2. (Historic Rate of Return and Risk) Consider an investment in one of two common stocks. Given the information that follows, which investment was better, based on risk (as measured by the standard deviation), return, and coefficient of variation?
Common Stock A Common Stock B
Return Return
10% 8%
13% 15%
20% 19%

Reference no: EM1351891

Questions Cloud

Discuss career paths for interest : Discuss career paths are of interest to you? How has the information presented in this course influenced your thoughts about your personal career path?

What is the maximum velocity with which the car can travel : From another measurement, you have found that velocity of the jumper's center of mass has only a y component of v2=2.5 m/s as the jumper's feet leave the floor.

Systematic desensitization : Systematic Desensitization involves gradually exposing a pet to the situation, without provoking the unwanted reaction.

Create application to generate a series of random numbers : Create the application to generate a series of 100 random numbers in the range of 1 through 1000. Save the series of numbers in a file.

Compute the investments expected return : B. J. Orange Corporation is evaluating a security. One-year Treasury bills are currently paying 1.9%. Compute the investment's expected return and standard deviation.

Find out the cars initial speed : After the first spring compresses a distance of 33cm, second spring acts with the first to increase the force as additional compression occurs. The car comes to rest 53.0 cm after first contacting the two-spring system. Find the car's initial spee..

Find out statistics on the web from present macroeconomic : Find out statistics on the web from 2004 to present on following indicators of the macroeconomic conditions of the U.S. economy.

Explain establishing ronald mcdonald houses : Explain Establishing Ronald McDonald Houses and temporary lodging for individuals with seriously ill family members and McDonald's has committed itself to more than just shareholder wealth maximization

Explain how will the economy evolve over time : suppose that the economy is currently in a recession. If policy-makers take no action, explain how will the economy evolve over time. Explain in words and using an aggregate-demand/ aggregate-supply diagram.

User Account

All Pages