Question
Your company is deciding to invest in 4 investments during the coming fiscal year an the investment analyst came up with the following Investment Rate
Your company is deciding to invest in 4 investments during the coming fiscal year an the investment analyst came up with the following
Investment | Rate of Return | Probability | Exp.Ret. | Deviation from Expectation Squared(pri) |
1 | -10% | 0.25 | (-10 -12)^2 (.25) = | |
2 | 5% | 0.30 | (5 - 12)^2 (030) = | |
3 | +20% | 0.25 | ||
4 | +40% | 0.20 | ||
TOTAL | 1.00 | _____ |
Risk = (Variance)0.5
1. The expected return is _____%
2. The Risk = _____ %
3. Based on one standard deviation the return could be as high as ____ % or as low as _____ %
4. What is the level of certainty when using only One Standard Deviation? Meaning?
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Financial Management for Public Health and Not for Profit Organizations
Authors: Steven A. Finkler, Thad Calabrese
4th edition
133060411, 132805669, 9780133060416, 978-0132805667
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