Question

What is the difference between standard deviation and value at risk? Consider the difference between purchasing a one-year bank CD compared with purchasing a homeowner's insurance policy. Which scenario do you believe is more likely to consider value at risk over standard deviation? Explain.

Answer #1

Make distinctions between the standard deviation and beta in the
measurement of risk in the capital market. Which one of these two
metrics (standard deviation and beta) is relevant for measuring the
risk of well-diversified portfolio? Explain why

Make distinctions between the standard deviation and beta in the
measurement of risk in the capital market. Which one of these two
metrics (standard deviation and beta) is relevant for measuring the
risk of well-diversified portfolio? Explain why.

What is the difference between the standard deviation and the
standard error? Is the standard error a standard deviation? Explain
a real life example using a distribution histogram.

These questions refer to Purchasing Power Parity.
Consider the relationship between expansionary monetary policy.
the value of the dollar, and net imports.
How does this new dollar value impact net exports? (3
Points)
Do these two work with each other in regards to economic growth?
Explain. (3 Points)

Compute the expected
return, standard deviation, and value at risk for each of the
following investments:
Investment (A): Pays
$800 three-fourths of the time and a $1,200 loss otherwise.
Investment (B): Pays $1,000 loss half of the time and a $1,600 gain
otherwise.
State which
investment will be preferred by each of the following investors,
and explain why.
(i) a risk-neutral
investor
(ii) an investor who
seeks to avoid the worst-case scenario.
(iii) a risk-averse
investor.

Compute the expected
return, standard deviation, and value at risk for each of the
following investments:
Investment (A): Pays
$800 three-fourths of the time and a $1,200 loss otherwise.
Investment (B): Pays $1,000 loss half of the time and a $1,600 gain
otherwise.
State which
investment will be preferred by each of the following investors and
explain why.
(i) a risk-neutral
investor
(ii) an investor who
seeks to avoid the worst-case scenario.
(iii) a risk-averse
investor.

Consider the following information:
Standard Deviation
Beta
Security C
20%
1.25
Security K
30%
0.95
Which security should have the higher expected return? Explain
in full. Please make sure to also explain which security has more
total risk, and which security has more systematic risk within your
answer.

Which describes the standard deviation?
a form of measurement of the average difference between sample
values and the sample mean
the confidence level that a sample mean accurately represents
a population mean
the value for which half of the sample elements are no bigger,
and half are no smaller
the interval around the sample mean that you expect to contain
the population mean

8. What is the standard deviation?
A. measure of the difference between the highest and lowest
variates.
B. measures how far the average variate differs from the
mean.
C. measure of differences between the individual variate and the
entire population.
D. measure of how widely individual variates in a population
vary.
13. An appraiser should be
A. objective.
B. consulted only in sales transactions.
C. compensated based on the determined value of the
property.
D. a party to a transaction....

Consider a 1-year option with exercise price $110 on a stock
with annual standard deviation 10%. The T-bill rate is 3% per year.
Find N(d1) for stock prices $105, $110, and $115.
If you could explain the difference between D and N(d1) that
would be great. I think that is where im getting stuck

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