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The Average realized return on BLM's stock was 19.05% Based on economic conditions, you've compiled the following estimates of returns from BLM's stock and the
The Average realized return on BLM's stock was 19.05%
Based on economic conditions, you've compiled the following estimates of returns from BLM's stock and the probabilities associated with the economic condition for the next year: Market Condition Probability BLM's rj Boom 0.50 38% Normal 0.25 23% Recession 0.25 -30% The standard deviation of returns for Blue Llama Mining's stock is (Note: Do not round intermediate calculation.) If investors expect the average realized return from 2012 to 2016 on BLM's stock to continue into the future, its coefficient of variation (v) will be Suppose you need to invest $10,000 in Blue Llama Mining Inc. or another company called Robonomics Corp. You know that Robonomics Corp. has a coefficient of variation of 2.94, and you have calculated the coefficient of variation for BLM. 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. is two times more risky than Blue Llama Mining (BLM) Inc. Blue Llama Mining (BLM) Inc. is two times more risky than Robonomics CorpStep by Step Solution
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