Scenario analysis has many practical applications in addition to being used to forecast security returns. In this

Question:

Scenario analysis has many practical applications in addition to being used to forecast security returns. In this problem, scenario analysis is used to forecast an exchange rate. Jim Danday’s forecast for the Euro/dollar exchange rate depends upon what the U.S. Federal Reserve and European central bankers do to their country’s money supply. Jim is considering the scenarios and exchange rate forecasts that are listed in the text.

a. What is Jim’s expected exchange rate forecast?

b. What is the variance of Jim’s exchange rate forecast?

c. What is the coefficient of variation of Jim’s exchange rate forecast?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...