As part of your work as a banking industry analyst, you build models for forecasting earnings per share of the banks you cover. Today you are studying BankCorp. In Exhibit 1, you have recorded a probability distribution for BankCorp’s EPS for the current fiscal year.

1. What is the expected value of BankCorp’s EPS for the current fiscal year?

2. Using the probability distribution of EPS from Exhibit 1, you want to measure the dispersion around your forecast. What are the variance and standard deviation of BankCorp’s EPS for the current fiscal year?

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Exhibit 1: Probability Distribution for BankCorp's EPS Probability 0.15 0.45 0.24 0.16 1.00 EPS (USD) 2.60 2.45 2.20 2.00