Complete: a minimum of 1,000 words (total assignment) and three scholarly sources.
- How do you think risk should be measured? Explain your reasoning.
- Explain what is meant by “risk drives expected return”.
- For Asset A and for Asset B, compute the average annual return, variance, standard deviation, and coefficient of variation for the annual returns given below.
a. Asset A: 5%, 10%, 15%, 4%
b. Asset B: -6%, 20%, 2%, -5%, 10%
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4. Compute the holding period returns for each security below:
Price One Year Ago
5. Find the real return, nominal after-tax return, and real after-tax return for each of the following stocks:
6. In what ways does a proprietorship differ from a partnership? In what ways does a proprietorship differ from a corporation?
7. What information might a changing stock price give to managers?
8. What are agency costs? Give some examples. How might they be measured?