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Problem 13-23 Portfolio effect of a merger [LO13-5] Hooper Chemical Company, a major chemical firm that uses such raw materials as carbon and petroleum
Problem 13-23 Portfolio effect of a merger [LO13-5] Hooper Chemical Company, a major chemical firm that uses such raw materials as carbon and petroleum as part of its production process, is examining a plastics firm to add to its operations. Before the acquisition, the normal expected outcomes for the firm were as follows: Recession Nornal economy Strong economy Outcomes (5 millions) Probability $10 0.4 20 30 0.2 0.4 Compute the expected value, standard deviation, and coefficient of variation prior to the acquisition. (Do not round intermediate calculations. Enter your dollar answers in millions rounded to 2 decimal places (e.g., $12,300,000 should be entered as "12.30"). Round the coefficient of variation to 3 decimal places.) Treynor Ple Company Gourmet restaurant Baby food company Nutritional products company Coefficient of Variation
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