General Meters is considering two mergers. The first is with Firm A in its own volatile industry, the auto speedometer industry, while the second is a merger with Firm B in an industry that moves in the opposite direction (and will tend to level out performance due to negative correlation).

General Meters Merger with Firm A							General Meters Merger with Firm B
Possible Earnings ($ in millions)			Probability				Possible Earnings ($ in millions)			Probability
	$ 40			.30				$ 40			.25
	60			.40				60			.50
	80			.30				80			.25

a. Compute the mean, standard deviation, and coefficient of variation for both investments. (Enter your answers in millions. Do not round intermediate calculations. Round "Coefficient of variation" to 3 decimal places and "Standard deviation" to 2 decimal places.)

Mean-

Standard Deviation-

Coefficient of Variation-

b. Assuming investors are risk-averse, which alternative can be expected to bring the higher valuation?

	Merger A
	Merger B