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Returns earned over a given time period are called realized returns. Historical data on realized returns is often used to estimate future results. Analysts across

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Returns earned over a given time period are called realized returns. Historical data on realized returns is often used to estimate future results. Analysts across companies use realized stock returns to estimate the risk of a stock. Consider the case of Falcon Freight Inc. (FF): Five years of realized returns for FF are given in the following table. Remember: 1. While FF was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for FF for 2012 to 2015 are: Given the preceding data, the average realized return on FF's stock is Based on economic conditions, you've complied the following estimates of returns from FF's stock and the probabilities associoted with the economic condition for the next year: Given the preceding dato, the average realized return on FF's stock is Based on economic conditions, you've complied the following estimates of returns from FF's stock and the probabilities associated with the economic condition for the next year: The standard deviation of returns for Falcon Freight's stock is (Note: Do not round intermediate calculation.) If investors expect the average realized return from 2012 to 2016 on FF's stock to continue into the future, its coefficient of variation (v) will be Suppose you need to invest $10,000 in Falcon Frelghtinc. or another company called Robonomics Corp. You know that Robonomics Corp. has a coefficient of variation of 3.10, and you have calculated the coefficient of variation for Fh. To make your investment decision, You spend some time analyzing the situation. Based on your analysis, which of the following statements is true? Robonomics Corp, has more risk per unit of return than Falcon Frelight (PF) Inc. Falcon Frelght (FF) Inc. has more risk per unit of return than Aabonomles Corp

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