Question
An investor buys an asset at an initial cost of $20,124,578. The investor believes that at the end of one year, the asset could have
An investor buys an asset at an initial cost of $20,124,578. The investor believes that at the end of one year, the asset could have four possible values. These values and probabilities are provided in the table below. Scenario Expected value Probability A 18,865,000 25% B 21,100,770 40% C 24,165,000 30% D 26,247,000 5% Required In dollars and cents, what is the expected value of the asset in 1 year? (2 marks) In percentage terms to 2 decimal places, what is the expected return on the asset? (1 mark) In percentage terms to 2 decimal places, what is the expected standard deviation of the return of the asset? (1 mark) What is the coefficient of variation of this portfolio? (1 mark)
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