The Journey

The Journey book range is expected to deliver a return of 21.8% but a deviation of

2.25% may potentially prevail.

Additional information:

Neverland has R12 000 000 worth of funding available to invest into these

potential book ranges and is aiming to invest R7 400 000 into Fable Fights and

the remainder into The Journey. This will result in covariance of 33%.

Both the Fable Fights and The Journey book ranges outcomes are expected

to indicate a normal distribution pattern.

Assist Neverland (Pty) Ltd in determining the expected rate of return and the

standard deviation of the Fable Flights book range.

2.2. Assist Neverland (Pty) Ltd by calculating the range in which The Journey

books actual expected return is likely to be within, up to a 95.5% accuracy.

2.3. Assist Neverland (Pty) Ltd in determining the risk attached to investing into both

book ranges in the manner that the entity indicated. Determine this risk by

calculating the applicable standard deviation for the portfolio.

Show all calculations.

Neverland (Pty.) Ltd ("Neverland") is a large South African publisher with a nationwide footprint. The entity is looking into possibly publishing two new book ranges - one a fictional book range (titled "Fable Fights") and the other a biography book range ("The Journey"). Both book ranges will be made available in both print and electronic format ("e-books"). Fable Fights The various possible returns that could potentially be generated by Neverland from investing into the Fable Flight range have been given below together with the possibility of generating that specific return