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Deck 22: Web Appendix: A Review of Statistics and the Security Market Line
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Deck 22: Web Appendix: A Review of Statistics and the Security Market Line
The standard deviation of your expected return from this investment is
A) 0.001
B) 0.004
C) 0.124
D) 1.240
E) None of the above
A) 0.001
B) 0.004
C) 0.124
D) 1.240
E) None of the above
0.124
The expected return from this investment is
A) -0.0752
B) -0.0040
C) 0.00
D) 0.0075
E) 0.4545
A) -0.0752
B) -0.0040
C) 0.00
D) 0.0075
E) 0.4545
D
E(R) = (-0.10)(0.15) + (-0.20)(0.15) + (0.00)(0.35) + (0.15)(0.25) + (0.15)(0.10) = 0.0075
E(R) = (-0.10)(0.15) + (-0.20)(0.15) + (0.00)(0.35) + (0.15)(0.25) + (0.15)(0.10) = 0.0075
The coefficient of variation of this investment is
A) -0.06
B) -0.65
C) 6.60
D) 16.53
E) 165.10
A) -0.06
B) -0.65
C) 6.60
D) 16.53
E) 165.10
D
The coefficient of variation (CV) equals 0.124 / 0.0075 = 16.53
The coefficient of variation (CV) equals 0.124 / 0.0075 = 16.53
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