Mr Arthur is a very big investor in oil industry. He makes his decisions after calculating all the parameters concerning to risk and return associated with any project. Recently his friend has proposed him two projects given below. possible outcome probability Rate of return Company A (%) Company B (%) Boom 0.3 50 30 Normal 0.4 25 20 recession 0.3 -10 15 Required: Calculate Coefficient of variation for company B Calculate Variance for company A Calculate expected return for company A Calculate Standard Deviation for company A
Mr Arthur is a very big investor in oil industry. He makes his decisions after calculating all the parameters concerning to risk and return associated with any project. Recently his friend has proposed him two projects given below. possible outcome probability Rate of return Company A (%) Company B (%) Boom 0.3 50 30 Normal 0.4 25 20 recession 0.3 -10 15 Required: Calculate Coefficient of variation for company B Calculate Variance for company A Calculate expected return for company A Calculate Standard Deviation for company A
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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Question
Mr Arthur is a very big investor in oil industry. He makes his decisions after calculating all the parameters concerning to risk and return associated with any project. Recently his friend has proposed him two projects given below.
|
possible outcome |
probability |
|
|
|
|
|
Company A (%) |
Company B (%) |
|
Boom |
0.3 |
50 |
30 |
|
Normal |
0.4 |
25 |
20 |
|
recession |
0.3 |
-10 |
15 |
Required:
Calculate Coefficient of variation for company B
Calculate Variance for company A
Calculate expected return for company A
Calculate Standard Deviation for company A
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