Question
Nancy is considering investing in a company's stock and is aware that the return on that investment is particularly sensitive to how the economy is
Nancy is considering investing in a company's stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment. Use the following table of returns and probabilities to determine the coefficient of variation for the investment. (Round answer to 5 decimal places, e.g. 0.07680.)
Probability Return
Boom 0.3 25.00%
Good 0.4 15.00%
Level 0.2 10.00%
Slump 0.1 -5.00%
Use the table of returns and probabilities above to determine the expected return on Nancys investment? (Round answer to 3 decimal places, e.g. 0.076.)
Expected return_______
Use the table of returns and probabilities above to determine the standard deviation of the return on Nancy's investment? (Round answer to 5 decimal places, e.g. 0.07680.)Standard deviation____
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