A project has a 0.37 chance of doubling my investment in a year and 0.63 chance of halving my investment in a year. What is the standard deviation of the rate of return on the investment? Im thinking 0.37 X 200% +0.63*0.50 but I'm lost after this point.
A project has a 0.37 chance of doubling my investment in a year and 0.63 chance of halving my investment in a year. What is the standard deviation of the rate of return on the investment? Im thinking 0.37 X 200% +0.63*0.50 but I'm lost after this point.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A project has a 0.37 chance of doubling my investment in a year and 0.63 chance of halving my investment in a year. What is the standard deviation of the rate of
Im thinking 0.37 X 200% +0.63*0.50 but I'm lost after this point.
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Step 1
Return on investment (ROI) is a performance metric used to evaluate how efficiently an investment is executed. It can also be used to assess potential business risks and choose which ones to pursue.
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