Question $2(30$ marks

UNDAMENTAL OF FINANCEII

a$)$

asset purchases. The an firm manufacturing sofa. The company must choose between two the firm's analysis. probabilities given below summarize

Expected rate expected rate of retum.

$(0\mathrm{.}2535\%)+(0\mathrm{.}2010\%)+$

$=\frac{0\mathrm{.}13}{13}\%.$

$45$ set $B$ praides $=\frac{0\mathrm{.}13}{13}\%$

ii$.$ For each asset, compute the standard larger atern.

Standard ASSe$+B=0\mathrm{.}18$

Standard deviation

$(8$ marks$)$

$18\%.$

$=\sqrt[\phantom{2}]{}$

$=\sqrt[\phantom{2}]{{\displaystyle \underset{j=1}{\overset{n}{}}}{p}_{x_j}}(ij-E(r){)}^2$

step $(1)$ Find variance

Asset $A=$