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In answering the following questions, it is given that the potential investment has the following range of possible outcomes and probabilities: 15% probability of a
In answering the following questions, it is given that the potential investment has the following range of possible outcomes and probabilities: 15% probability of a -20% return, 20% probability of a 10% return, 30% probability of a 20% return, 20% probability of a 40%, and 15% probability of a 70% return. (a) Calculate the weighted mean of the probability distribution; (b) Calculate the variance of the probability distribution; (c) Calculate the standard deviation of the probability distribution. (d) Calculate the coefficient of variation of the probability distribution. (e) Would another investment having a coefficient of variation of 0.25 have less risk per unit of expected return
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