Which security is riskier

Assignment Help Financial Management
Reference no: EM13923726

Security A has an expected return of 7%, a standard deviation of returns of 35%, a correlation coefficient with the market of -0.3, and a beta coefficient of -1.5. Security B has an expected return of 12%, a standard deviation of returns of 10%, a correlation with the market of 0.7, and a beta coefficient of 1.0. Which security is riskier? Why?

Reference no: EM13923726

Questions Cloud

Find the acceleration if the bodies are released : On an inclined plane of 30° a block, mass m2 = 4 kg, is joined by a light cord to a solid cylinder, mass m1 = 8 kg, radius r = 5 cm (Fig. 1). Find the acceleration if the bodies are released. The coefficient of friction between the block and the i..
Expansion project-requires initial fixed asset investment : Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.67 million. The fixed asset will be depreciated straight-line over its three-year tax life, and the fixed asset will have a marke..
Management of heider corporation : The management of Heider Corporation is considering dropping product J14V
Specific web or mobile application purpose : Describe a specific web or mobile application's purpose. How is it used? What changes has it brought about to its users? What are some likely future uses and enhancements?
Which security is riskier : Security A has an expected return of 7%, a standard deviation of returns of 35%, a correlation coefficient with the market of -0.3, and a beta coefficient of -1.5. Security B has an expected return of 12%, a standard deviation of returns of 10%, a co..
Elements controlling proper access to information it uses : Develop the flow diagram of the information and any control elements needed to ensure proper access for the information. Submit a 700- to 1,050-word section of the paper with the following
What is the break-even volume of internal process : The manager of Green Daisy Inc. is in the process of deciding whether to make or buy carburettors for its power lawn mowers. If Green Daisy decides to manufacture the carburetor, it could utilize one of two manufacturing processes. What is the break-..
Project cash flows : Project Cash Flows: Your highly successful software company is considering adding a new software title to your list. If you add the new product, it will use the full capacity of your disk duplicating machines that you planned on using for your flagsh..
Ensor materials corporation approved a stock : On October 15, 2015, the board of directors of Ensor Materials Corporation approved a stock option plan for key executives. On January 1, 2016, 26 million stock options were granted, exercisable for 26 million shares of Ensor's $1 par common stock. T..

Reviews

Write a Review

Financial Management Questions & Answers

  Determine price of one year up-output with barrier-strike

You are given that a stock has current value of 34 and has a dividend rate of \delta= 0.02. The risk free rate is 0.05. You are given that the price of a one year call with strike 35 is 2.12. You also know the price of a one year up and input with ba..

  Considered in the fixed charge coverage ratio

Which of the following would not be considered in the fixed charge coverage ratio?

  Bonds yield to maturity in the bond matures

A bond's market price is $1,100. It has a $1,000 par value, will mature in 12 years and has a coupon interest rate of 11 percent annual interest, but makes its interest payment semiannually. what is the bond's yield] to maturity? What happens to the ..

  Do you believe stock repurchases helped the stock price

Pick a public company of your choosing that has been buying back its own shares in at least three of the past five years. Who is the company and how many shares did they repurchase in each of those years? Do you believe the stock repurchases helped t..

  Choosing a streaming media service

Instead of immediately committing to one choice, you can take each service for a "test drive" to see which one you prefer - Price makes a big difference when it comes to choosing a streaming media service. Fortunately, all of the services are priced..

  Projected sales-estimate of the current stock price

Ernie Manufacturing has projected sales of $155 million next year. Costs are expected to be $100 million and net investment is expected to be $17.5 million. Each of these values is expected to grow at 14 percent the following year, with the growth ra..

  Difference in present value between using a discount rate

You are going to receive $205,000 in 50 years. What is the difference in present value between using a discount rate of 14 percent versus 9 percent? Use Appendix B as an approximate answer, but calculate your final answer using the formula and financ..

  Bonus versus stock

The company has offered you a $5,000 bonus, which you may receive today, or 100 shares of the company’s stock, which has a current stock price of $50 per share. Mathematically, what is the best choice? Why?

  What was the flotation cost as percentage of funds raised

The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $17.30 for each of the 15 million shares sold. The initial offering price was $21.00 per share, and the stock rose to $23.40 per share in the first few minutes of t..

  Find what is the project''s net present value

The initial cost of the fixed assets is $61,000. These assets will be worthless at the end of the project. An additional $4,500 of net working capital will be required throughout the life of the project.

  Find the monthly savings that equals this fv

Tyler is putting away $1,250 per month in an account earning 9.25% annually. the plane he would like to buy currently costs $430,000 and is expected to increase in price at an annual inflation rate of 3.25% how long will it take Tyler to save up the ..

  Markets risk-free rate

One year ago, Matt bought 100 shares of ACE Corp. stock for $5,619 including commission. He is about to sell the ACE stock for $6,528 net of commissions. When he made the purchase the S&P 500 index was at 907; now it is 1070. The beta of ACE stock is..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd