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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

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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 Possible Earnings ($ in millions) Probability $ 20 0.30 0.40 60 0.30 General Meters Merger with Firm B Possible Earnings ($ in millions) Probability $ 20 0.25 0.50 60 0.25 40 40 a. Compute the mean, standard deviation, and coefficient of variation for both investments. (Do not round intermediate calculations. Enter your answers in millions. Round "Coefficient of variation" to 3 decimal places and "Standard deviation" to 2 decimal places.) Merger A Merger B Mean Standard deviation Coefficient of variation b. Assuming investors are risk-averse, which alternative can be expected to bring the higher valuation? Merger A O Merger B

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