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1 QUESTION 1. The possible returns from investing in BestMax share are as follows: Return if state Probability of state of economy occurs 0.26 96%
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QUESTION 1. The possible returns from investing in BestMax share are as follows: Return if state Probability of state of economy occurs 0.26 96% State of economy Strong Normal Weak 0.51 (b) Coefficient of variation 0.23 12% -83% MARKS Based on the above information, calculate the following for BestMax share: (a) Standard deviation of return (9) (3) (c) What does the coefficient of variation reveal about an investment's risk that the standard deviation does not? Explain. (d) What is 'risk' in the context of financial decision making? Explain. (4) (4) (Total: 20)Step by Step Solution
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