Author Question: Seasonality is introduced into financial ratios by averaging monthly account balances, and thus it ... (Read 38 times)

soccerdreamer_17 · **on:** Jul 11, 2018

Seasonality is introduced into financial ratios by averaging monthly account balances, and thus it is
recommended that ending account balances be used.

Indicate whether the statement is true or false

Question 2

You are going to add one of the following three projects to your already well-diversified portfolio.

PROJECT 1 PROJECT 2
Probability Return
Standard
Deviation Beta Probability Return
Standard
Deviation Beta
50 Chance 22 12 1.1 30 Chance 36 19.5 0.8
50 Chance -4 40 Chance 10.5
30 Chance -20
PROJECT 3
Probability Return
Standard
Deviation Beta
10 Chance 28 12 2.0
70 Chance 18
20 Chance -8
Assume the risk-free rate of return is 2 and the market risk premium is 8. If you are a risk
averse investor, which project should you choose?
A) Project 1
B) Project 2
C) Project 3
D) Either Project 2 or Project 3 because the higher expected return on project 3 offsets its higher
risk

olderstudent · **Reply #1 on:** Jul 11, 2018

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Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

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