Corporate Finance.

Corporate Finance 1
Corporate Finance
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Corporate Finance 2
1.
The average monthly returns for the three companies are as shown in the table below:
Table 1: Returns summary statistics
WBC Returns AMC Returns AVEO Returns
Average Monthly Returns 0.001352 0.003672 0.03223
Standard Deviation of Returns 0.052637 0.11517 0.348554
2.
Table 2: Coefficient of variation
WBC Returns AMC Returns AVEO Returns
Average Monthly Returns 0.001352 0.003672 0.03223
Standard Deviation of Returns 0.052637 0.11517 0.348554
Coefficient of Variation 38.92589 31.36296 10.81456
An investor who is risk-averse should consider assets with a historically degree of
volatility that is low but with a degree of returns that is high. Hence, the investor should
invest in AVEO which has the lowest degree of variation of 10.81 with the highest degree
of returns of 3.22%.
On the other hand, a risk-seeking investor should look into assists with a historically
degree of volatility that is high. Hence, the investor should choose WBC with the highest
volatility at 38.93 and AMC with a volatility of 31.36.