Answer:
Stock X has a CV of 4 while Stock Y has a CV of 2. As stock Y has a lower CV than Stock X, it is less riskier.
Explanation:
The coefficient of variation is a statistical model which is also used to determine the volatility per unit of a factor. In terms of a stock, the coefficient of variation calculates the volatility of its return. It is calculated by dividing the stock's standard deviation, which is a measure of risk, by the stock's mean return or expected return.
CV = SD / r
Where,
- CV is coefficient of variation
- SD is standard deviation
- r is expected return
The CV of a stock tells us the risk per unit of return. The higher the CV, the riskier the stock and vice versa.
Stock X has a CV of 4 while Stock Y has a CV of 2. As stock Y has a lower CV than Stock X, it is less riskier.
This is an example of a moral hazard, which is when someone is more likely to engage in dangerous behavior when they perceive that they are protected from the consequences.
United States’ savings rate is only around 10%, much lower than any other countries. There's some reasoning behind it. In fact, countries with the highest savings rates weren’t necessarily the countries with the highest GDPs. GDP os US is $56,300 per capita but their household savings rate of just 4.9%. Also, in Hungary their GDP is $26,000 while their savings rate of 9.0%. This implies that the money they have isn't place on one nest only or put to savings, rather allocated to a much more important sectors. We should not forget taking into account their purchasing power parity, the rate a currency would have to be converted into another to buy the same amount of goods and services of the country.
Answer:
Investment is equal to 890 million.
Explanation:
Investment refers to the money that is used to produce goods. Investment can be calculated by adding the private savings, the public savings that is determined by subtracting the government spending to the taxes received and the trade deficit that refers to the imports minus the exports.
I= S+(T-G)+(M-X)
S= private savings
T= net taxes
G= government spending
M= imports
X= exports
I= 990+(699-999)+(600-400)
I=990-300+200
I= 890
