ols Window Help 1-520-52214629620302607-main.pdf (page 2 of 7) ECON4013_1 Fin Markets and Corp Finance_201804.pdf (page 5 of 7) Q Search Consider the following investment opportunity in Nert Ball Enterprises (NBE). We are in a CAPM world. The future payoffs (at time t-1) associated with a unit of investment in NBE described by the diagram below. The probabilities of each individual payoff are shown in the diagram below. Additionally, suppose that the required rate of return and expected rate of return on M (the Market Portfolio) is rn = 12% and the risk-free rate of return is n = 2%. Prob. 1/4 1/2 1/4 NBE future values: -20 +30 +100 a) What is the expected future value (at time t=1) for Nerf Ball Enterprises? b) Calculate the standard deviation (SD) of future values for Nerf Ball Enterprises c) Suppose one unit of investment in NBE was offered to you at a price of 28. What is your expected return from such an investment (ROI)? d) Suppose Bree = 3. What return does the market expect from one unit of investment in NBE? What would be the NPV of your investment in one unit of NBE at the price offered to you (28) in part c) above? e) Calculate the standard deviation (SD) of the return the market requires (nee) on investment in Nerf Ball Enterprises. Assuming that the correlation coefficient between Thee and ris 1, calculate the standard deviation (SD) on Im. 23 09 NT\O