The coefficient of variation is a better measure of stand-alone risk than standard deviation because it is a standardized measure of risk per unit; it is calculated as the divided by the expected return. the coefficient of variation shows the risk per unit of return, so it provides a more meaningful risk measure when the expected returns on two alternatives are not . the sharpe ratio compares the asset's realized excess return to its over a specified period. excess returns measure the amount that investment returns are above the risk-free rate — so investments with returns equal to the risk-free rate will have a sharpe ratio. it follows that over a given time period, investments with sharpe ratios performed better, because they generated higher excess returns per unit of risk. the sharpe ratio is calculated as:
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Business, 21.06.2019 22:40, eamber646
Lincoln company has an accounting policy for internal reporting purposes whereby the costs of any research and development projects that are over 70 percent likely to succeed are capitalized and then depreciated over a five-year period with a full year of depreciation in the year of capitalization. in the current year, $400,000 was spent on project one, and it was 55 percent likely to succeed, $600,000 was spent on project two, and it was 65 percent likely to succeed, and $900,000 was spent on project three, and it was 75 percent likely to succeed. in converting the internal financial statements to external financial statements, by how much will net income for the current year have to be reduced? a. $180,000b. $380,000c. $720,000d. $900,000
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The coefficient of variation is a better measure of stand-alone risk than standard deviation because...
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