1.What do financial managers look for when they analyze pro forma financial statements?
2.What action(s) should be taken if analysis of pro forma financial statements reveals positive trends? Negative trends?
3.What is risk aversion? If common stockholders are risk averse, how do you explain the fact that they often invest in very risky companies?
4.Explain the risk–return relationship.
5.Why is the coefficient of variation often a better risk measure when comparing different projects than the standard deviation?