Debra is considering investing in a company's stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment. Use the following table of returns and probabilities to determine the coefficient of variation for the investment. (Round answer to 5 decimal places, e.g. 0.07680.) Probability Return Boom 0.2 25.00% Good 0.4 15.00% Level 0.3 10.00% Slump 0.1 -5.00%
Debra is considering investing in a company's stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment. Use the following table of returns and probabilities to determine the coefficient of variation for the investment. (Round answer to 5 decimal places, e.g. 0.07680.) Probability Return Boom 0.2 25.00% Good 0.4 15.00% Level 0.3 10.00% Slump 0.1 -5.00%
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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Debra is considering investing in a company's stock and is aware that the
Use the following table of returns and probabilities to determine the coefficient of variation for the investment. (Round answer to 5 decimal places, e.g. 0.07680.)
| Probability | Return |
|
Boom
|
0.2 | 25.00% |
|---|---|---|
|
Good
|
0.4 | 15.00% |
|
Level
|
0.3 | 10.00% |
|
Slump
|
0.1 | -5.00% |
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