1. Riverhawk is considering investing in a stock. The return on this investment is very sensitive to the state of the economy. Riverhawk has analyzed the performance of the stock and developed the following possible distribution of returns.

Possible State Probability Rate of return

Booming economy 0.15 25%

Medium growth 0.25 18%

Low growth 0.4 7%

Recession 0.2 -5%

What is the expected return from the investment?

A. 0.0098

B. 1.0156

C. 0.0992

D. 0.1005

E. 0.9868

2.

Riverhawk is considering investing in a stock. The return on this investment is very sensitive to the state of the economy. Riverhawk has analyzed the performance of the stock and developed the following possible distribution of returns.

Possible State Probability Rate of return

Booming economy 0.15 25%

Medium growth 0.25 18%

Low growth 0.4 7%

Recession 0.2 -5%

What is the variance of the return from the investment?

A. 0.9868

B. 0.0098

C. 0.1005

D. 1.0156

E. 0.0992

3.

Riverhawk is considering investing in a stock. The return on this investment is very sensitive to the state of the economy. Riverhawk has analyzed the performance of the stock and developed the following possible distribution of returns.

Possible State Probability Rate of return

Booming economy 0.15 25%

Medium growth 0.25 18%

Low growth 0.4 7%

Recession 0.2 -5%

What is the standard deviation of the return from the investment?

A. 0.0098

B. 0.0992

C. 0.1005

D. 1.0156

E. 0.9868

4.

Riverhawk is considering investing in a stock. The return on this investment is very sensitive to the state of the economy. Riverhawk has analyzed the performance of the stock and developed the following possible distribution of returns.

Possible State Probability Rate of return

Booming economy 0.15 25%

Medium growth 0.25 18%

Low growth 0.4 7%

Recession 0.2 -5%

What is the coefficient of variation of the return from the investment?

A. 0.0098

B. 1.0156

C. 0.9868

D. 0.0992

E. 0.1005