Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:A game of chance offers the following odds and payoffs. Each play of the game costs $100. so the net profit per play is the payoff less
$100.
Probability
0.10
Payoff
$700
Net Profit
$680
0.5e
100
0.40
-100
a-1. What is the expected cash payoff? (Round your answer to the nearest whole dollar amount.)
a-2 What is the expected rate of return? (Enter your answer as a percent rounded to the nearest whole number.)
b-1. What Is the varlance of the expected returns? (In the calculation, use the percentage values, not the decimal values for the
rates of return. Do not round intermedlate calculations. Round your answer to the nearest whole number.)
b-2. What is the standard devlation of the expected returns? (Enter your answer as a percent rounded to 2 decimal places.)
a-1. Expected cash payoff
a-2. Expected rate of retum
%
b-1.
Variance
b-2.
Standard deviation
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