1. Al Bundy is evaluating a new advertising program that could increase shoe sales. Possible outcomes and probabilities of the outcomes are shown below. Compute the coefficient of variation.

*Possible Outcomes *Additional Sales in Units *Probabilities

Ineffective campaign 40 .20

Normal response 60 .50

Extremely effective 140 .30

2. In doing a five-year analysis of future dividends, Newell Labs, Inc., is considering the following two plans. The values represent dividends per share.

Year Plan A Plan B
1 $2.50 $ .80

2 2.55 3.30

3 2.50 .35

4 2.65 2.80

5 2.65 6.60

a. How much in total dividends per share will be paid under each plan over the five years?
b. Ms. Carter, the vice-president of finance, suggests that stockholders often prefer a stable dividend policy to a highly variable one. She will assume that stockholders apply a lower discount rate to dividends that are stable. The discount rate to be used for Plan A is 10 percent; the discount rate for Plan B is 12 percent. Which plan will provide the higher present value for the future dividends? (Round to two places to the right of the decimal point.)

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1. Al Bundy is evaluating a new advertising program that could increase shoe sales. Possible outcomes and probabilities of the outcomes are shown below. Compute the coefficient of variation.

*Possible Outcomes *Additional Sales in Units *Probabilities

Ineffective campaign 40 .20

Normal response 60 .50

Extremely effective 140 .30

For calculating the coefficient of variation we need to find expected (average) value and standard deviation
Coefficient of variation = Standard deviation / Average

Possible Outcomes Additional sales (units) Probability Cash inflow x Probability Difference from mean, i.e.80 Difference 2 Prob x Difference 2
Ineffective ...

Solution Summary

Answers 2 questions:
1) Calculation of Coefficient of Variation for a new advertising program
2) Dividends: total dividends per share paid under each of 2 plans; present value for the future dividends.

Based on the following information, calculate the coefficient of variation and select the best investment based on the risk/reward relationship.
Std Dev. Exp. Return
Company A 7.4

Coefficient of Variation and Standard Deviation are two measures of dispersion or spread among the data values.
Let's say we have two different sets of data.
Explain which of the two mentioned measures can more accurately find which of these two data sets have more spread or variability in their data values.
You can se

Two securities, X and Y. Determine bases on the info given the AVERAGE RETURN, STANDARD DEVIATION, and COEFFICIENT of VARIATION.
YEAR RETURN X RETURN Y
1995 16.5% 17.5%
1996 14.2%

Two stocks with actual returns as follows are being considered by me as an investor. Assist me by calculating the standard deviation and the coefficient of variation and avise me based on a comparison of risk and return.
Stock X - Actual Returns: 6%, 12%, 8%, 10%
Stock Z - Actual Returns: 9.5%, 9.25%, 8%, 9%

When comparing two projects with different returns and different standard deviations, the risk measure which can be used is called the
a. variance.
b. certainty equivalent.
c. coefficient of correlation.
d. coefficient of variation.

The __________ is the ratio of __________ to the _____________.
a standard deviation; covariance; expected value
b coefficient of variation; expected value; standard deviation
c correlation coefficient; standard deviation; expected value
d coefficient of variation; standard deviation; expected value
e

The market portfolio is assumed to be composed of two securities, investment X and investment Y. Determine based on the information given the average return, standard deviation and coefficient variation. Which is the better investment?
Year Return X Return Y
1997 16.5% 17.5%
1998

I need the input and formula for these solutions:
Two years ago, Conglomco stock ended at $73.02 per share. Last year, the stock paid a $0.34 per share dividend. Conglomco stock ended last year at $77.24. If you owned 200 shares of Conglomco stock, what were your dollar return and percent return last year?
Calculate the coef

State Pi kj
1 0.3 20%
2 0.4 5
3 0.3 12
Calculate the expected return for security j.
Calculate the standard deviation for security j.
Calculate the coefficient of variation for security j.