Please answer the questions below for Kuyucakl Yusuf (KY) and Krk Mantolu Madonna (KMM) Corporations: (show all your computations)

x=2

a) Compute the expected return of each stock.

KY Inc.:

KMM Inc.:

b) Compute the total risk () of each stock.

KY Inc.:

KMM Inc.:

c) Compute the coefficient of variation of each stock. Evaluate the results.

KY Inc.:

KMM Inc.:

Evaluation:

Economy Probability Recession Average Boom 0.30 0.40 0.30 Expected Returns Km 2 KY Inc. KMM Inc. -0.4x -0.2x 0.3x 0.2x 0.6x 0.5x