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
$	15			0.40			$	15			0.35
	25			0.50				25			0.60
	35			0.10				35			0.05

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.)

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

• Merger A

• Merger B