Question
Mountain Ski Corp. was set up to take large risks and is willing to take the greatest risk possible. Lakeway Train Co. is more typical
Mountain Ski Corp. was set up to take large risks and is willing to take the greatest risk possible. Lakeway Train Co. is more typical of the average corporation and is risk-averse.
| Projects | Returns: Expected Value | Standard Deviation | ||||
| A | $ | 326,000 | $ | 214,000 | ||
| B | 702,000 | 448,000 | ||||
| C | 133,000 | 112,000 | ||||
| D | 171,000 | 109,000 | ||||
a-1. Compute the coefficients of variation. (Round your answers to 3 decimal places.)
a-2. Which projects should Mountain Ski Corp. choose?
| Project A | |
| Project B | |
| Project C | |
| Project D |
b. Which one of the four projects should Lakeway Train Co. choose based on the same criteria of using the coefficient of variation?
| Project B | |
| Project D | |
| Project C | |
| Project A |
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Volatility Trading
Authors: Euan Sinclair
2nd Edition
1118347137, 9781118347133
