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(Expected return and risk) Universal Corporation is planning to invest in a security that has several possible rates of return. Given the probability distribution of
(Expected return and risk) Universal Corporation is planning to invest in a security that has several possible rates of return. Given the probability distribution of returns in the popup window, B, what is the expected rate of return on the investment? Also compute the standard deviation of the returns. What do the resulting numbers represent? a. The expected rate of return on the investment is %. (Round to two decimal places.) b. The standard deviation of the returns is %. (Round to two decimal places.) c. What do the resulting numbers represent? (Select the best choice below.) O A. Universal could expect a return of 9.00 percent with a 67 percent possibility that this return would vary up or down by 7.35 percent. OB. Universal could expect a return of 7.35 percent with a 67 percent possibility that this return would vary up or down by 9.00 percent. C. Universal could expect a return of 9.00 percent with a 25 percent possibility that this return would vary up or down by 7.35 percent. OD. Universal could expect a return of 7.35 percent with a 25 percent possibility that this return would vary up or down by 9.00 percent. (Expected return and risk) Universal Corporation is planning to invest in a security that has several possible rates of return. Given the probability distribution of returns in the popup window, , what is the expected rate of return on the investment? Also compute the standard deviation of the returns. What do the resulting numbers represent? a. The expected rate of return on the investment is %. (Round to two decimal places.) b. The standard deviation of the returns is % A Data Table c. What do the resulting numbers represent? (9 X (Click on the following icon in order to copy its contents into a spreadsheet.) O A. Universal could expect a return of 9.00 p O B. Universal could expect a return of 7.35 p O C. Universal could expect a return of 9.00 p OD. Universal could expect a return of 7.35p PROBABILITY 0.05 0.15 0.25 0.55 RETURN 10% 0% 5% 15% Print Done
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