Answer:
a-1)
- Project A = 0.70
- Project B = 0.64
- Project C = 0.81
- Project D = 1.29
a-2) Mountain Ski Corp. should choose projects D and C
b) Lakeway Train Co. should choose project B
Explanation:
It’s needed to calculate the coefficient of variation for each project
Formula: CV=σ/μ
Where:
σ = standard deviation
μ = mean
The coefficient of variation (CV) is a ratio that compares the standard deviation with the mean of a project`s return, indicating the volatility and risk of it. The lower its value the better risk-return trade-off. So, a company set up to take large risks such as Mountain Ski Corp. would choose projects with high CV (Projects D and C), and a risk-averse company such as Lakeway Train Co. would choose projects with low CV (Project B).
A time horizon<span> is the length of </span>time<span> over which an investment is made or held before it is ended. </span>Time horizons<span> can range from seconds, in the case of a day trader, all the way up to decades for a buy-and-hold investor or an individual who is investing in a retirement plan.</span>
Answer:
<em>The answer is 60.</em>
Explanation:
<em>The First step in solving the example given, is to recall the following steps to be taken </em>
<em>The standard deviation of return on investment A =10%</em>
<em>The standard deviation of return on investment B =5%</em>
<em>The co-variance of returns both on A and B =.0030</em>
<em>The next step is as follows</em>
<em>co-variance = correlation </em>
<em>.0030 (.05 x .10) = 60</em>
<em>Therefore the correlation coefficient between the returns of A and B is 60</em>
The two measures of instability in economic growth are high unemployment rates and inflation
Answer:
thanks for asking for help
