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Economy Below average Average Above average Probability Luxury Boats Inc. 24% -23% 60% 11% 35% Ramen King 20% 3% -10% Drugs-R-Us 4.2% 4% 3.7% (6)

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Economy Below average Average Above average Probability Luxury Boats Inc. 24% -23% 60% 11% 35% Ramen King 20% 3% -10% Drugs-R-Us 4.2% 4% 3.7% (6) a. What is the expected return for Luxury Boats Inc.? 4% b. 5% 5.98% d. 1.08% 6.68% c. e. a. What is the stand-alone risk for Ramen King? 9.61% b. 13.03% 12.30% d. 7.51% e. 22.56% c. What is the coefficient of variance for Ramen King? (6) a. 0.52 b. 1.92 c. 2.61 d. 2.46 e. 0.41 If you invested 25% of your money in Luxury Boats Inc., 25% in Ramen King, and the rest in Drugs-R-Us, what is your expected return? a. 4.00% b. 5.84% c. 4.92% d. 5.23% It is unknown since the state of the economy in the future is uncertain. e

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