Problem 13-6 (Algo) Coefficient of variation [LO13-1) Possible outcomes for three investment alternatives and their probabilities of occurrence are given next. Alternative 3 Failure Acceptable. Successful Alternative 1 Alternative 2 Outcomes Probability Outcomes Probability 0.20 Alternative 11 Alternative 2 Alternative 3 50 80 120 Coefficient of Variation 0.20 0.40 0.40 Rank 90 185 205 0.40 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. Outcomes 65 320 420 Probability 0.20 0.60 0.20
Problem 13-6 (Algo) Coefficient of variation [LO13-1) Possible outcomes for three investment alternatives and their probabilities of occurrence are given next. Alternative 3 Failure Acceptable. Successful Alternative 1 Alternative 2 Outcomes Probability Outcomes Probability 0.20 Alternative 11 Alternative 2 Alternative 3 50 80 120 Coefficient of Variation 0.20 0.40 0.40 Rank 90 185 205 0.40 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. Outcomes 65 320 420 Probability 0.20 0.60 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
Section: Chapter Questions
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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.
Alternative 1
Alternative 2
Outcomes Probability Outcomes Probability
0.20
0.40
0.40
Failure
Acceptable.
Successful
Alternative 1
Alternative 2
Alternative 31
50
80
120
Coefficient of
Variation
8.20
0.40
0.40
Rank
98
185
205
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.
2
Drau
Alternative 3
Outcomes
65
320
420
5 of 9
Probability
8.20
0.60
0.20
#
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