Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Standard Deviation
An investment must be evaluated on two dimensions - rate of return and risk. An investor cannot enjoy a high return without any exposure to risk. The higher the return, the higher is the risk involved and the lower the exposure to risk, the lower would be the return. Risk is defined as the chance of injury, damage or loss. Risk in investments is the chance of the actual returns realized being much lower than the expected returns.
The risk in an investment is normally measured by the variance or standard deviation in the returns from the mean or expected return. The idea is, the higher the value of dispersion (that is, variance or standard deviation), the higher is the risk. If all possible or actual returns lie close to the mean return, then the total risk in investment is less and the investor has an assurance that at least the mean rate of return will be earned on the investment.
The variance and standard deviation of returns from the share of Godavari Petrochemicals Limited may be calculated as under:
Rates of Return
Probability of Occurrence
Deviations from Expected Rate of Return
Squares of Deviation
Probability x Squares of Devation
(Xi)
(Pi)
30%
0.30
10.2
104.04
31.212
18%
0.50
-1.8
3.24
1.620
9%
0.20
-10.8
116.64
23.328
Total
56.160
PRC Company, a retailer of baby clothes and toys, has been in existence for 20 years. Its approach to strategy has tended to be informal and emergent rather than planned. However,
How many types of segments in the mutual fund industry? There are two segments into the mutual fund industry: long-term funds and short-term funds. In Long-term funds bond fund
An issue with a put provision included in the agreement grants the bondholder the right to sell bonds back to the issuer at a pre-specified rate
Prevention of Risk - Method of risk management In case of this method, the business avoids risk by taking appropriate steps for prevention of business risk or avoiding loss, su
The banking sector has a vital and active role in the money market. The transactions taking place in these securities are large in size, both in terms of volumes
#how to calculate initial investment cash flows ..
Q. What do you signify by Receivables Management? Ans. Receivable Management: - The term receivables refer to debt outstanding to the firm by the customers resulting from sale
Explain how management goals are incorporated into pro forma financial statements. Management locates a target goal, and forecasters produce pro forma financial statements within
QUESTION i) Discuss the Modigliani-Miller irrelevancy theorem for corporate capital structure. What assumptions underline the theorem? ii) What are the implications when the
Mergers and Acquisitions It is a Process of business combination. There are 3 forms of business combination: 1. M1. M1 has the highest liquidity. This is the narrowest t
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd