1. From the information below, compute the average annual return, the variance, standard deviation, and coefficient of variation for each asset.ASSET ANNUAL RETURNSA 5%, 10%, 15%, 4%B 2 6%, 20%, 2%, 2 5%, 10%C 12%, 15%, 17%D 10%, 2 10%, 20%, 2 15%, 8%, 2 7%2. Based upon your answers to question 1, which asset appears riskiest based on standard deviation? Based on coefficient of variation?7. Find the real return, nominal after-tax return, and real after-tax return on the following:STOCK NOMINAL RETURN INFLATION TAX RATEX 13.5% 5% 15%Y 8.7% 4.7% 25%Z 5.2% 2.5% 28% 9. Using the information below, compute the percentage returns for the following securities:SECURITYPRICETODAYRoadRunner \$20.05StockWiley Coyote \$33.42stockAcme longtermPRICE ONE DIVIDENDS INTERESTYEAR AGO RECEIVED RECEIVED\$18.67\$0.50\$45.79\$1.10bondsAcme shorttermbondsXlingshotStock\$1,015.38\$991.78\$996.63\$989.84\$5.43 \$3.45\$100.00\$45.75\$0.0210. Given her evaluation of current economic conditions, Ima Nutt believes there is a 20 percent probability of recession, a 50 percent chance of continued steady growth, and a 30 percent probability of infl ationary growth. For each possibility, Ima has developed an interest rate forecast for long-term Treasury bond interest rates:ECONOMIC INTEREST RATEFORECAST FORECASTRecession 6 percentConstant growth 9 percentInfl ation 14 percenta. What is the expected interest rate under Imaâs forecast?b. What is the variance and standard deviation of Imaâs interest rate forecast?c. What is the coeffi cient of variation of Imaâs interest rate forecast?d. If the current long-term Treasury bond interest rate is 8 percent, should Ima consider purchasing a Treasury bond? Why or why not?11. Ima is considering a purchase of Wallnut Company stock. Using the same scenarios and probabilities as in problem 10, she estimates Wallnutâs return is 2 5 percent in a recession, 20 percent in constant growth, and 10 percent in infl ation.a. What is Imaâs expected return forecast for Wallnut stock?b. What is the standard deviation of the forecast?c. If Wallnutâs current price is \$20 per share and Wallnut is expected to pay a dividend of \$0.80 per share next year, what price will Ima expect Wallnut to sell for in one year?

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