« previous next »

Author Question: It is typically easy to determine a precise mix of optimal debt and equity. Indicate whether the ... (Read 39 times)

Brittanyd9008

  • Hero Member
  • *****
  • Posts: 500
on: Jul 11, 2018
It is typically easy to determine a precise mix of optimal debt and equity.
 
  Indicate whether the statement is true or false

Question 2

Investment A has an expected return of 14 with a standard deviation of 4, while investment B
  has an expected return of 20 with a standard deviation of 9. Therefore,
 
  A) rational investors could pick either A or B, depending on their level of risk aversion.
  B) a rational investor will pick investment B because the return adjusted for risk (20 - 9) is
  higher than the return adjusted for risk for investment A (14 - 4).
  C) a risk averse investor will definitely select investment A because the standard deviation is
  lower.
  D) it is irrational for a risk-averse investor to select investment B because its standard deviation
  is more than twice as big as investment A's, but the return is not twice as big.


tandmlomax84

  • Sr. Member
  • ****
  • Posts: 323
Reply #1 on: Jul 11, 2018
Answer to Question 1

FALSE

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

All adults should have their cholesterol levels checked once every 5 years. During 2009–2010, 69.4% of Americans age 20 and older reported having their cholesterol checked within the last five years.

Did you know?

As of mid-2016, 18.2 million people were receiving advanced retroviral therapy (ART) worldwide. This represents between 43–50% of the 34–39.8 million people living with HIV.

Did you know?

If you could remove all of your skin, it would weigh up to 5 pounds.

Did you know?

Eating food that has been cooked with poppy seeds may cause you to fail a drug screening test, because the seeds contain enough opiate alkaloids to register as a positive.

Did you know?

By definition, when a medication is administered intravenously, its bioavailability is 100%.

Approach used to determine the evolutionary relationships among many animal species using molecular Approach used to determine the evolutionary relationships among many animal species using molecular
For some Americans, religion is an “easy-going, makes-little-difference” matter, as expressed in ... For some Americans, religion is an “easy-going, makes-little-difference” matter, as expressed in ...
Calculation of body mass index. To determine your BMI, find the value for your height on the left ... Calculation of body mass index. To determine your BMI, find the value for your height on the left ...
Asomatognosia typically involves damage to the right parietal lobe. Asomatognosia typically involves damage to the right parietal lobe.
How to calculate the DRT to determine which is more effective against the pathogen How to calculate the DRT to determine which is more effective against the pathogen
Use of forward and reverse genetics to determine gene function Use of forward and reverse genetics to determine gene function
Video: Stomach peristalsis - Movement of Food Through the Small Intestine

For a complete list of videos, visit our video library