# Module 7 The Meaning and Measurement of Risk Assignment

*label*Business Finance

*timer*Asked: Feb 7th, 2019

*account_balance_wallet*$10

### Question Description

If your major is not accounting or finance " please don't accept "

**The Meaning and Measurement of Risk **

Complete the following problems:

- Problem 7-1: Standard Deviation
- Problem 7-2: Holding-Period Gain and Return
- Problem 7-3: Capital Asset Pricing Model
- Problem 7-4: Breakeven Point and Selling Price
- Problem 7-5: Operating Leverage

You can access the problem details by excel file.

Direction:

Complete the problems in an Excel spreadsheet. Be sure to show your work to receive credit.

### Unformatted Attachment Preview

## Tutor Answer

Attached.

MODULE 7 CT PROBLEMS

THE MEANING AND MEASUREMENT OF RISK AND RETURN

CT 7 - 1

Chapter 6

STANDARD DEVIATION

Given the following probabilities and returns for UAE Corporation, find the Expected Return and

standard deviation.

DATA

PROBABILITY

RETURNS

0.15

5%

0.30

7%

0.40

12%

0.15

20%

Solution

Expected return

DEVIATION

10.65%

Deviation Squared

0.32%

0.13%

0.02%

0.87%

Variance

Standard Deviation

CT 7 - 2

HOLDING PERIOD GAIN AND RETURN

Probability

0.15

0.30

0.40

0.15

Probability x

Deviation

Squared

0.0479%

0.0400%

0.0073%

0.1311%

0.2263%

4.76%

Chapter 6

Suppose you purchased 30 shares of UAE Corporation stock for SAR 22.35 per share on February 1. On

O...

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