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The following are the likely returns from investments in shares of Pharma Company and Consumer Goods Company, together with the associated probabilities: Return on Pandemic
The following are the likely returns from investments in shares of Pharma Company and Consumer Goods Company, together with the associated probabilities: Return on Pandemic Return on Pharma Situation Probability Consumer Goods Company shares Company shares Worsened 1/3 (i.e. 0.333) 20% 5% Improved 1/3 15% 15% Do not exist 1/3 10% 25% The current market price of the companies is Rs. 40 per share. You are required to: a. Calculate expected return and standard deviation on investment of Rs. 1000 in shares of Pharma Company. b. Calculate expected return and standard deviation on investment of Rs. 400 in shares of Pharma Company and of Rs. 600 in shares of Consumer Goods Company
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