A) Calculate the expected rate or return on each alternative.

B) You should recognize that basing a decision solely on expected return is appropriate..

C) Suppose you suddenly remembered that the coefficient of variation.

D) someone mentioned that you might also want to calculate the sharpe ratio..

E) using a 3% risk free rate

1. Calculate the expected rate of return on each alternative. 2. You should recognize that basing a decision solely on expected returns is appropriate only for risk-neutral individuals. Your client is risk-averse, so the riskiness of each alternative is an important aspect of your investment decision. To measure the risk, calculate the standard deviation for each of the alternatives. 3. Suppose you suddenly remembered that the coefficient of variation (CV) is generally regarded as being a better measure of stand-alone risk than the standard deviation when the alternatives being considered have widely differing expected returns. Calculate the missing CV's. Does the CV produce the same risk rankings as the standard deviation? 4. Someone mentioned that you might also want to calculate the Sharpe ratio as a measure of stand-alone risk. Using the 3% risk free rate for T-Bills, calculate the Sharpe ratios. Briefly explain what the Sharpe ratio actually measures. 5. Using a 3.0\% risk-free rate, and a required rate of return on portfolio of 8.0%, calculate the required rates of return on each of the alternatives using the Security Market Line equation. ri:=rRF+(rMrRF)bi