QUESTION 1 Your rate of return expectations for the stock of Gidimadjor Company during the next year are Possible Rate of Return (kk) Possible Rate of Return Probability (Gidimadjor Itd) -0.60 0.56...


QUESTION 1<br>Your rate of return expectations for the stock of Gidimadjor Company during the next<br>year are<br>Possible Rate of Return (kk) Possible Rate of Return<br>Probability<br>(Gidimadjor Itd)<br>-0.60<br>0.56<br>0.15<br>-0.30<br>0.36<br>0.10<br>-0.10<br>-0.08<br>0.05<br>0.20<br>0.02<br>0.40<br>0.40<br>0.33<br>0.20<br>0.80<br>0.51<br>0.10<br>a. Compute the expected return [E(Ri)] on this stock, the variance (o2) of this return, and its<br>standard deviation (a).<br>b. On the basis of expected return [E(Ri)] alone, discuss whether KK Itd. Or Gidimadjor is<br>preferable.<br>c. On the basis of standard deviation (6) alone, discuss whether KK Itd. Or Gidimadjor is<br>preferable.<br>d. Compute the coefficients of variation (CVs) for KK Itd and Gidimadjor and discuss which<br>stock return series has the greater relative dispersion.<br>

Extracted text: QUESTION 1 Your rate of return expectations for the stock of Gidimadjor Company during the next year are Possible Rate of Return (kk) Possible Rate of Return Probability (Gidimadjor Itd) -0.60 0.56 0.15 -0.30 0.36 0.10 -0.10 -0.08 0.05 0.20 0.02 0.40 0.40 0.33 0.20 0.80 0.51 0.10 a. Compute the expected return [E(Ri)] on this stock, the variance (o2) of this return, and its standard deviation (a). b. On the basis of expected return [E(Ri)] alone, discuss whether KK Itd. Or Gidimadjor is preferable. c. On the basis of standard deviation (6) alone, discuss whether KK Itd. Or Gidimadjor is preferable. d. Compute the coefficients of variation (CVs) for KK Itd and Gidimadjor and discuss which stock return series has the greater relative dispersion.

Jun 05, 2022
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