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frutty [35]
3 years ago
15

QUESTION 01 (10 points) ‐ Coefficient of Variation (CV) We need to compare volatility of multiple assets. As the assets have dif

ferent variation ranges, e.g. a big stock versus a penny stock, it is useful to look at the coefficient of variation, not the standard deviation, as a measure of volatility. We have the following population data:
Asset A Asset B Asset C
Mean ($) 181.92 0.38 247.19
Standard deviation ($) 23.48 0.09 27.31

(a) Give an equation for the coefficient of variation in percentage terms.
(b) Find volatility of the three assets. Use two decimals for percentages, e.g. 23.76%.
(c) Which asset is the least volatile? Which asset is the most volatile?
Business
1 answer:
barxatty [35]3 years ago
4 0

Answer:

a, Coefficient of variation

   = <u>Standard deviation</u> x 100

          Mean

b, Coefficient of variation

  Asset A

   Coefficient of variation

   = <u>$23.48</u>   x 100

      $181.92

  = 12.91%

   Asset B

  Coefficient of variation

  = <u>$0.09</u> x 100

     $0.38

 = 23.68%

  Asset C

   Coefficient of variation

  = <u>$27.31 </u>  x 100

     $247.19

  = 11.05%

Asset C is least volatile while Asset B is most volatile

Explanation:

Coefficient of variation is the ratio of standard deviation to mean (expected return) multiplied by 100. It is used to measure the volatility of assets. Asset  C has the least coefficient of variation, thus, it is the least volatile. Asset B has the highest coefficient of variation, which implies that it is the most volatile.

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Suppose you are evaluating two mutually exclusive projects, A and B. Project A costs $350 and has cash flows of $250 and $250 in
ki77a [65]

Answer:

The answer is 30%

Explanation:

Solution

Given that:

Project A

Project A costs = $350

Cash flows =$250 and $250 (next 2 years)

Project B

Project B costs =$300

Cash flow = $300 and  $100

Now what is the crossover rate for these projects.

Thus

Year Project A    Project B A-B        B-A

0            -350     -300        -50        50

1             250      300        -50        50

2             250      100         150       -150

IRR         27%      26%         30%      30%

So,

CF = CF1/(1+r)^1 + CF2/(1+r)^2

$-50 = $-50/(1+r)^1 + $150/(1+r)^2

r = 30%

CF = CF1/(1+r)^1 + CF2/(1+r)^2

$50 = $50/(1+r)^1 + $-150/(1+r)^2

r = 30%

Hence, the cross over rate for these project is 30%

Note:

IRR =Internal rate of return

CF =Cash flow

r = rate

5 0
3 years ago
During the past six months, Ben sold goods that cost $43,500, his
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Answer:

for this problem the answer would be A. 3.08

Explanation:

Add the expenses and freight (3,500+1,750)

Subtract that from 43,500 (43,500-5250 which equals 38,250). Divide 38,250 by 12,400.

38,250÷12,400=3.08

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The production department is proposing the purchase of an automatic insertion machine. It has identified 3 machines and has aske
cricket20 [7]

Answer: the correct answer is a. Machine B

Explanation:

Machine A average rate return

40000 out of 300000. It means that 300000 is 100% and $ 40000 is X. We apply a simple three rule:

40000       X                     X= 4000000/300000

300000     100%               X= 13.33%

Machine B average rate return

50000 out of 250000. It means that 250000 is 100% and $ 50000 is X. We apply a simple three rule:

50000       X                     X= 5000000/250000

250000     100%               X= 20%

Machine C average rate return

$75,000 out of $500,000. It means that $500,000 is 1005 and $75,000 is X. We apply a simple three rule

$75,000     X                       X=7500000/500000

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The highest average is the one onf Machine B

4 0
3 years ago
An accounting clerk for Chesner Co. prepared the following bank reconciliation:
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Answer:

A. Adjusted balance $17,760

Adjusted balance $17,760

B. $17,760

Explanation:

A. Preparation of a new bank reconciliation for Chesner Co.

Cash balance according to bank statement l

$14,220

Add Deposit in transit on August 31 $6,690

Deduct Outstanding checks $3,150

Adjusted balance $17,760

Cash balance according to company's records $6,570

Add Error by Chesner Co. in recording Check No. 1056 as $820 instead of $280 540

Add Note for $10,300 collected by bank, including interest 10,710

Less Bank service charges 60

Adjusted balance $17,760

B. Based on the above bank reconciliation If a balance sheet were prepared for Chesner Co. on July 31, 2016 the amount that should be reported for cash is $17,760

From the data prepared by the accounting clerk,

b. If a balance sheet were prepared for Chesner Co. on July 31, 2016, what amount should be reported for cash?

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