Expected Return/Variance/Coefficient of Variation

Practice Problems

1)Given the following, calculate Expected Return:

Possible return Probability

15% .2

23 .4

30 . 2

35 .2

2)Calculate the variance given the information from question #1.

3)Calculate the standard deviation, given the information from question #1.

4)Calculate the coefficient of variation, given the information from question #1.

5) In comparison to the investment analyzed above, if another investment had a standard deviation of 3.0 and a coefficient of variation of .42, which investment should a rational, risk averse investor choose for a single asset portfolio?