Question: Answer all parts please Right click on image and open image in new tab if text is too blurry to read Standard deviation versus coefficient
Answer all parts please
Right click on image and open image in new tab if text is too blurry to read
Standard deviation versus coefficient of variation as measures of risk Greengage, Inc., a successful nursery, is considering several expansion projects. All the alternatives promise to produce an acceptable return. Data on four possible projects appear in the following table: a. Which project is least risky, judging on the basis of range? b. Which project has the lowest standard deviation? Explain why standard deviation may not be an entirely appropriate measure of risk for purposes of this comparison. c. Calculate the coefficient of variation for each project. Which project do you think Greengage's owners should choose? OB. Project D OC. Project A OD. Project B Explain why standard deviation may not be an entirely appropriate measure of risk for purposes of this comparison. (Select the best answer below.) O A. The standard deviation measure fails to take into account both the volatility and the risk-free rate. Investors would prefer higher return but less volatility, and the coefficient of variation provides a measure that takes into account both aspects of investors' preferences. OB. The standard deviation measure fails to take into account both the risk-free rate and the return of the investment. Investors would prefer higher return but less volatility, and the coefficient of variation provides a measure that takes into account both aspects of investors' preferences. OC. The standard deviation measure fails to take into account both the volatility and the return of the investment. Investors would prefer higher return but less volatility, and the coefficient of variation provides a measure that takes into account both aspects of investors' preferences. OD. The standard deviation measure fails to take into account both the volatility and the return of the investment. Investors would prefer lower return but higher volatility, and the coefficient of variation provides a measure that takes into account both aspects of investors' preferences. c. The coefficient of variation for project A is (Round to three decimal places.) Data Table The coefficient of variation for project B is (Round to three decimal places.) The coefficient of variation for project is (Round to three decimal places.) (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) The coefficient of variation for project Dis. (Round to three decimal places.) Which project will Greengage's owners choose, judging on the basis of coefficient of variation? (Select the Expected return 12.3% 11.6% 12.9% 11.9% Project A B D O A. Project D OB. Project B O C. Project C OD. Project A Standard deviation 2.7% 3.4% 3.9% 3.1% Range 6.2% 4.8% 6.3% 5.2% Print Done
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