Question
Shauna wishes to establish a trust fund from which her son can withdraw $10,000 every six months for 21 years, when he reaches 30 years
Shauna wishes to establish a trust fund from which her son can withdraw $10,000 every six months for 21 years, when he reaches 30 years old. After 10 years, he will receive $150,000 for college. The trust will be invested at 6.7% per annum compounded semi-annually. How large should the trust be?
Stock X has an expected return of 18%, a beta coefficient of 0.9, and standard deviation of expected returns of 30%. Stock Y has an expected return of 18%, a beta of 1.2, and standard deviation 35%. The risk free rate is 6%, and the market risk premium is 5%.
i) Calculate each stock's coefficient of variation
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