#2 and #6

DISCUSSION QUESTIONS 2. 3. 4. 5. 6. If corporate managers are risk-averse, does this mean they will not take risks? Explain. (1,013-2) Discuss the concept of risk and how it might be measured. (L013-I ) When is the coefficient of variation a better measure of risk than the standard deviation? (L013-1 ) Explain how the concept of risk can be incorporated into the capital budgeting process. (L013-3) If risk is to be analyzed in a qualitative way, place the following investment deci- sions in order from the lowest risk to the highest risk: (L013-l ) a. New equipment. b. New market. c. Repair of old machinery d. New product in a foreign e. New product in a yxuketo f: Addition to a new product line. Assume a company, correlated with the economy, is evaluating six projects, of which two are positively correlated with the economy, two are negatively corre- lated, and two are not correlated with it at all. Which two projects would it select to minimize the company's overall risk? (L013-5)