Question
Mr. Fauzan was inherited some of her parents fortune. He plans to invest some funds to generate income. There are TWO investment options and all
Mr. Fauzan was inherited some of her parents fortune. He plans to invest some funds to generate income. There are TWO investment options and all information as stated below:
Danish Legacy Corporation | Haslam Empire Ltd | ||
Probability | Rate of Return | Probability | Rate of Return |
0.10 | -5.00% | 0.10 | 1.00% |
0.60 | 45.00% | 0.50 | 25.00% |
0.30 | 25.00% | 0.40 | 32.00% |
Based on the given information, you are required to calculate the following for each stock:
i. Expected rate of return (). (6 marks)
ii. Variance (6 marks)
iii. Standard Deviation of expected returns (). (9 marks)
iv. Coefficient of variation (CV). (3 marks)
v. Determine the best investment for Mr. Fauzan. (2 marks)
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