Possible outcomes for three investment alternatives and their probabilities of occurrence are given next. Failure Acceptable Successful Alternative 1 Alternative 2 Outcomes Probability Outcomes Probability 0.20 0.40 0.40 Alternative 1 Alternative 2 Alternative 3 30 70 105 Coefficient of Variation 0.10 0.50 0.40 Using the coefficient of variation, rank the three alternatives in terms of risk from lowest to highest. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Rank 80 195 250 Alternative 3 Outcomes Probability 110 0.30 350 0.50 400 0.20

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
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Problem 13-6 (Algo) Coefficient of variation [LO13-1]
Possible outcomes for three investment alternatives and their probabilities of occurrence are given next.
Failure
Acceptable
Successful
Alternative 1
Alternative 2
Outcomes Probability Outcomes Probability
0.10
80
0.20
0.50
195
0.40
0.40
250
0.40
Alternative 1
Alternative 2
Alternative 3
30
70
105
Coefficient of
Variation
Alternative 3
Using the coefficient of variation, rank the three alternatives in terms of risk from lowest to highest.
Note: Do not round intermediate calculations. Round your answers to 3 decimal places.
Rank
Outcomes
110
350
400
Probability
0.30
0.50
0.20
Transcribed Image Text:Problem 13-6 (Algo) Coefficient of variation [LO13-1] Possible outcomes for three investment alternatives and their probabilities of occurrence are given next. Failure Acceptable Successful Alternative 1 Alternative 2 Outcomes Probability Outcomes Probability 0.10 80 0.20 0.50 195 0.40 0.40 250 0.40 Alternative 1 Alternative 2 Alternative 3 30 70 105 Coefficient of Variation Alternative 3 Using the coefficient of variation, rank the three alternatives in terms of risk from lowest to highest. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Rank Outcomes 110 350 400 Probability 0.30 0.50 0.20
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