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b. Cemerlang Company must choose between two assets purchases. The annual rate of return and related probabilities given below summarize the firm's analysis. ASSET A
b. Cemerlang Company must choose between two assets purchases. The annual rate of return and related probabilities given below summarize the firm's analysis. ASSET A Rate of Return (%) Probability (%) 10 15 P1 20 30 30 ASSETB Rate of Return (%) Probability (%) 5 P2 15 20 25 40 Required: i. Calculate the expected return (3 marks) ii. Compute the standard deviation of the expected return (6 marks) iii. Which asset should this company select? Justify your answer. (1 mark)
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