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A First Course in Probability (10th Edition)
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ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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The board of directors of Gothic Products is considering acquiring one or two companies under close scrutiny the
management of each company, in order to make a transaction as least risky as possible. Over the past five years, the
first of the companies had an average return on investment of 28%, with a standard deviation of 5. 39. The other
the company had an average return on investment of 37.8%, with a standard deviation of 4.8%. If we consider risky
partner with a company that has a high relative spread in recovery, which of these two companies has been
playing a riskier strategy?
Select one:
Or a. The company that has had the riskiest recovery is number 1, because its deviation is 4.8%
Or b. The company that has had the riskiest recovery is number 2, because its deviation is 5,396
Or c. The company that has had the riskiest recovery is number 1, because its coefficient is 18.928596
Or d. The company that has had a riskiest recovery is number 2, because its coefficient is 12.6984%
6
Transcribed Image Text:The board of directors of Gothic Products is considering acquiring one or two companies under close scrutiny the management of each company, in order to make a transaction as least risky as possible. Over the past five years, the first of the companies had an average return on investment of 28%, with a standard deviation of 5. 39. The other the company had an average return on investment of 37.8%, with a standard deviation of 4.8%. If we consider risky partner with a company that has a high relative spread in recovery, which of these two companies has been playing a riskier strategy? Select one: Or a. The company that has had the riskiest recovery is number 1, because its deviation is 4.8% Or b. The company that has had the riskiest recovery is number 2, because its deviation is 5,396 Or c. The company that has had the riskiest recovery is number 1, because its coefficient is 18.928596 Or d. The company that has had a riskiest recovery is number 2, because its coefficient is 12.6984% 6
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