Question
BlueSky Corp. was set up to take large risks and is willing to take the greatest risk possible. River Train Co. is more typical of
BlueSky Corp. was set up to take large risks and is willing to take the greatest risk possible. River Train Co. is more typical of the average corporation and is risk-averse.
| Projects | Returns: Expected Value | Standard Deviation | ||||
| A | $ | 527,000 |
| $ | 834,000 |
|
| B |
| 682,000 |
|
| 306,000 |
|
| C |
| 74,000 |
|
| 135,000 |
|
| D |
| 140,000 |
|
| 89,000 |
|
b-1. Compute the coefficients of variation.
b-1. Compute the coefficients of variation.
b-2. Which of the following four projects should BlueSky Corp. choose?
b-3. Which one of the four projects should River Train Co. choose based on the same criteria of using the coefficient of variation?
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Financial Economics
Authors: Zvi Bodie, Robert C Merton, David Cleeton
2nd Edition
0558785751, 9780558785758
