Hi, Need help with this one ( have attached the table) Thanks Question Junior Sayou, a financial analyst for Chargers Products, a manufacturer of stadium benches, must evaluate the risk and return of two assets, X and Y. The firm is considering adding these assets to its diversified asset portfolio. To assess the return and risk of each asset, Junior gathered data on the annual cash flow and beginning-and end-of-year values of each asset over the immediately preceding 10 years, 2006-2015. These data are summarized in the attached table. Junior?s investigation suggests that both assets, on average, will tend to perform in the future just as they have during the past 10 years. He, therefore, believes that the expected annual return can be estimated by finding the average annual return for each asset over the past 10 years. Junior believes that each asset?s risk can be assessed in two ways: in isolation and as part of the firm?s diversified portfolio of assets. The risk of the assets in isolation can be found by using the standard deviation and coefficient of variation of returns over the past 10 years. The capital asset pricing model (CAPM) can be used to assess the asset?s risk as part of the firm?s portfolio of assets. Applying some sophisticated quantitative techniques, Junior estimated betas for assets X and Y of 1.60 and 1.10, respectively. In addition he found that the risk-free rate is currently 7.0% and that the market return is 10.0%. Respond to the following: Calculate the annual rate of return for each asset in each of the 10 preceding years, and use those values to find the average annual return for each asset over the 10-year period. Use the returns calculated in part 1 to find (a) the standard deviation and (b) the coefficient of variation of the returns for each asset over the 10-year period. Use your findings in part 1 and 2 to evaluate and discuss the return and risk associated with each asset. Which asset appears to be preferable? Explain.

MGMT 332 - Module 6 Case Study Return data for Assets X and Y, 2006-2015 Asset X Asset Y Value Year Cash flow Beginning Ending Cash flow Beginning Ending 2006 $1,000 $20,000 $22,000 $1,500 $20,000 $20,000 2007 1,500 22,000 21,000 1,600 20,000 20,000 2008 1,400 21,000 24,000 1,700 20,000 21,000 2009 1,700 24,000 22,000 1,800 21,000 21,000 2010 1,900 22,000 23,000 1,900 21,000 22,000 2011 1,600 23,000 26,000 2,000 22,000 23,000 2012 1,700 26,000 25,000 2,100 23,000 23,000 2013 2,000 25,000 24,000 2,200 23,000 24,000 2014 2,100 24,000 27,000 2,300 24,000 25,000 2015 2,200 27,000 30,000 2,400 25,000 25,000 Ending Page 1 of 1