Coefficient of Variation as a measure of Risk
Not what you're looking for?
13/13. Mr. Sam Golff desires to invest a portion of his assets in rental property. He has narrowed his choices down to two apartment complexes, Palmer Heights and Crenshaw Village. After conferring with the present owners, Mr. Golff has developed the following estimates of the cash flows for these properties (see attached file).
Palmer Heights
Yearly After Tax cash flows Probability
10 0.1
15 0.2
30 0.4
45 0.2
50 0.1
Crenshaw Village
Yearly After Tax cash flows Probability
15 0.2
20 0.3
30 0.4
40 0.1
a. Find the expected cash flow from each apartment complex.
b. What is the coefficient of variation for each apartment complex?
c. Which apartment complex has more risk?
Purchase this Solution
Solution Summary
Answer to a question where Coefficient of Variation is calculated to measure risk.
Purchase this Solution
Free BrainMass Quizzes
Basics of corporate finance
These questions will test you on your knowledge of finance.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Motivation
This tests some key elements of major motivation theories.
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.