Universal Corporation is planning to invest in a security that has several possible rates of return Given the following probability distribution of returns, what is the expected rate of return on the investment Also compute the standard deviations of the returns What do the resulting numbers repres...

A B EXPECTED RETURN WEIGHTED PROBABILITY RETURN DEVIATION Pr r A x B r 2 Pr 010 10 1 5290 020 ...

Universal Corporation is planning to invest in a security that has several possible rates of return. Given

Question:

Universal is planning to invest in a security that has several possible rates of return. Given the following probability of returns, what is the expected rate of return on the investment? Also compute the standard deviations of the returns. What do the resulting numbers represent?
PROBABILITY RETURN
0.10.......... - 10%
0.20.......... 5%
0.30.......... 10%
0.40.......... 25% Corporation
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