Which of these two companies is best for investment? Trend Probability Rate of Retrun (Company A) Rate of Retrun (Company B) Bullish Trend 0.3 50% 25% Normal Trend 0.4 20% 15% Beaerish Trend 0.3 -10% 15%
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Which of these two companies is best for investment?
| Trend | Probability | Rate of Retrun (Company A) | Rate of Retrun (Company B) |
| Bullish Trend | 0.3 | 50% | 25% |
| Normal Trend | 0.4 | 20% | 15% |
| Beaerish Trend | 0.3 | -10% | 15% |
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- A firm has a choice between 2 investment proposals. Using the information in the table below, which investment will the firm choose? A firm has a choice between 2 investment proposals. Using the information in the table below, which investment will the firm choose? Investment A Investment B Mean return 15% 15% Standard deviation of returns .9% .8% Correlation coefficient -.8 -.7The returns on AA Berhad and BB Berhad are given below, State of Economy Probability of Return (%) AA Return (%) BB occurring Berhad Berhad 1 0.30 6 -15 0.50 10 18 3 0.20 17 40 Calculate: a) Expected return E(R) for i) АА Beфad ii) ВВ Behad b) Standard deviation for i) AA Berhad ii) ВВ ВBehad c) Discuss any FOUR (4) benefits of diversification by referring to AA and BB Berhad.a Rance 0ortotal tSpendingjJariance The Walnut Division of Benton core hurdle rate isug9o. Calculate the return on investment Calculate the profit, nmargin ÇalculateThe invest ment turnover (alculate the residual income
- Determining Missing Items in Return Computation One item is omitted from each of the following computations of the return on investment: Rate of Returnon Investment = Profit Margin x InvestmentTurnover 13.2% = 6% x (a) (b) = 10% x 1.80 10.5% = (c) x 1.50 15% = 5% x (d) (e) = 12% x 1.10 Determine the missing items identified by the letters as shown above. If required, round your answers to two decimal places. (a) fill in the blank 1 (b) fill in the blank 2% (c) fill in the blank 3% (d) fill in the blank 4 (e) fill in the blank 5%Accessibility tab summary: Given information for this question is presented in rows 2 through 10. Requirement information is presented in rows 12 through 20. Market Data Return Standard Deviation Beta Market Data 0.120 0.200 1.000 Risk-Free Rate 0.025 0.000 0.000 Company Data A B C Alpha 0.015 0.020 -0.005 Beta 1.200 0.800 1.250 Residual standard deviation, σ(e) 0.105 0.195 0.067 Standard Deviation of Excess Return 0.245 0.235 0.210 Required: Using the data above, please solve for the Sharpe Ratio, Treynor's Measure, and Information Ratio. (Use cells A3 to D10 from the given information to complete this question. Negative answers should be input and displayed as a negative values. All other answers should be input and displayed as positive values.) Risk-Adjusted Performance Measures A B C Market Sharpe Ratio Treynor's…Market Data Return Standard Deviation Beta Market Data 0.120 0.200 1.000 Risk-Free Rate 0.025 0.000 0.000 Company Data A B C Alpha 0.015 0.020 -0.005 Beta 1.200 0.800 1.250 Residual standard deviation, σ(e) 0.105 0.195 0.067 Standard Deviation of Excess Return 0.245 0.235 0.210 Required: Using the data above, please solve for the Sharpe Ratio, Treynor's Measure, and Information Ratio.
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