Calculate the project's coefficient of variation. (Hint: Use the expected NPV.) Squared dev. Prob. NPV NPVI - E(NPV) Squared deviation times probability 0.24 $6,289.81 $5,829 SS 0.24 -52.390.74 -$2.852 SS 0.32 -$1.233.33 -S1.694 SS 0.20 -$ 400.00 -S861 $ $ 1.00 $ 461.11 Variance S Standard deviation S 5.87 6.52 7.25 7.97 8.77

Calculate the project's coefficient of variation. (Hint: Use the expected NPV.) Squared dev. Prob. NPV NPVI - E(NPV) Squared deviation times probability 0.24 $6,289.81 $5,829 SS 0.24 -52.390.74 -$2.852 SS 0.32 -$1.233.33 -S1.694 SS 0.20 -$ 400.00 -S861 $ $ 1.00 $ 461.11 Variance S Standard deviation S 5.87 6.52 7.25 7.97 8.77

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Calculate the project's coefficient of variation. (Hint: Use the expected NPV.) Squared dev. Prob. NPV NPVI - E(NPV) Squared deviation times probability 0.24 $6,289.81 $5,829 S$ 0.24 -$2.390.74 -$2,852 S$ 0.32-$1,233.33 -S1,694 $S 0.20 -$ 400.00 -$861 $S 100 $ 461.1i Variance $. Standard deviation S 5.87 6.52 7.25 7.97 8.77
Assume you are risk-averse and have the following three choices. Standard Deviation Project A B C Expected Value $ 2,520 2,930 2,480 $ 1,420 1,050 1,040 a. Compute the coefficient of variation for each. Note: Round your answers to 3 decimal places. Project A B C Coefficient of Variation b. Which project will you select? O Project C O Project A O Project B
For investment A, the probability of the return being 20.0% is 0.5, 10.0% is 0.4, and -10.0% is 0.1 Compute the standard deviation for the investment with the given information. (Round your answer to one decimal place.) a. 85.00% b. 15.00% c. 34.00% d. 17.00% e. 9.00%
Assume you are risk-averse and have the following three choices Expected Value $ 2,200 Standard Deviation $ 1,440 Project A B C 2,730 2,250 Project A B C 1,960 1,490 a. Compute the coefficient of variation for each. Note: Round your answers to 3 decimal places. Coefficient of Variation b. Which project will you select? O Project A O Project B O Project C
Suppose the net present values of projects A and B show a distribution as follows. Net Present Value (TL) 750 1000 1250 1500 1750 Project A 0.1 0.15 0.2 0.25 0.3 Project B 0.15 0.25 0.3 0.1 0.2 a) Compare the projects according to the expected value criteria? b) Compare the projects by standard deviation criteria? c) Evaluate A and B projects according to the coefficient of variation criteria?
Compute the expected return, variance, and standard deviation of the following assets. Show the solutions Probability Return of Assets Asset A Asset B Asset C 25% .030 .030 -.030 25% .050 .180 .280 25% .100 .080 -.180 25% .280 -.050 -0.180 Expected Return Variance Standard Deviation
Let each decision variable, A, P, M, H, and G, represent the fraction or proportion of the total investment placed in each investment alternative. Max 0.073A + 0.103P + 0.064M + 0.075H + 0.045Gs.t. A + P + M + H + G = 1 0.5A + 0.5P - 0.5M - 0.5H <= 0 -0.5A - 0.5P + 0.5M + 0.5H <= 0 -0.25M - 0.25H + G >= 0 -0.6A + 0.4P >= 0 A, P, M, H, G <= 0 a. What fraction of the portfolio should be invested in each type of security (A, P, M, H, G)?b. How much should be invested in each type of security?c. What are the total earnings for the portfolio?d. What is the marginal rate of return on the portfolio? That is, how much more could be earned by investing one more dollar in the portfolio? *Please use excel solver & show all steps**
Boom Nasional Berhad, find the standard deviation. PROBABILITY RETURN 0.35 8% 0.20 3% 0.20 20% 025 15%
Example 3 Inns oont alafrA Following Example 2, consider a porfolio with three assets S1, S2 and S3 which have expected rates of return 0.1,0.15 and 0.2 respectively, and variance-covariance matrix odni tanoma bszt a aitevi ot botoly 0.1 0.1 -0.1 0.1 0.2 0.1 ololles V = -0.1 0.1 0.6 vo ) isaas sod slais a at gaiteoo ottg ndi oda vodT (aldanoitesup als ot-lais wod ibuadala abnod on a) What is the optimal portfolio when up = worod of sidad = 0.2. adt yhalinie ini ba moe ja SOLUTION lo ano ot b) Use this piece of information and the earlier optimal portfolios from la aao e. Example 2 to find the quadratic equation relating of and up. ni bstni sd SOLUTION tar oad o bo s e) Hence draw a plot of the solutions, and identify the frontier port- Ldon to slar folios. it SOLUTION ods Btvni gatela dt
Consider the information below, compute the expected return, variance, and standard deviation. Show the solution. Probability Return of Assets 25% .30 25% .050 25% .100 25% .280
(8) Consider projects A and B with the following forecasted net present values sensitive to the evolution of the economy: Scenario 1 (р-0.3) II (р-0.7) A (mil. Lei) 3 4 B (mil. Lei) 2 6. Use the coefficient of variance to select the preferable project. CVA=..... CVB=......
In calculating IRR for a project, you determine that you must find i* that satisfies (A/P, i, 6) = 0.200. The Compound Interest Tables show that (A/P, 5%, 6) = 0.19702 and (A/P, 6%, 6) = 0.20336. Using Linear Interpolation, what is i*?

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