The Andrew Jonathan SLOTTJE Company has proposed a new branch in Dallas for next year. The project's
Question:
The Andrew Jonathan SLOTTJE Company has proposed a new branch in Dallas for next year. The project's returns are as follows:
Year_______________ Project Return (Ri)
1994…………………………………..0.11
1995…………………………………..0.15
1996…………………………………..0.13
1997…………………………………..0.16
1998…………………………………..0.17
1999…………………………………..0.19
2000…………………………………..0.21
2001…………………………………..0.10
2002…………………………………..0.09
2003…………………………………..0.11
Based on this information do the following:
- 1. Calculate the expected return.
- 2. Calculate the variance and standard deviation of all the returns.
- 3. Calculate the coefficient of variation of all the returns.
- 4. Create a chart to illustrate the trend in project returns over time.
- 5. Add a solid line representing the expected return and dotted lines illustrating a 95% confidence interval about the expected return.
Include a brief discussion that contains an analysis, as well as your recommendation, for this case.
- The expected return is equivalent to the mean value.
- The coefficient of variation is defined as
Standard Deviation
Coefficient of variation = ---------------------------- X 100
Mean
This is a measure of the risk involved in the investment.
- For 95% confidence is equal to 2.5710. Based on this calculate the upper and lower confidence interval using the standard deviation of the sample distribution.
Principles of Information Systems
ISBN: 978-1133629665
11th edition
Authors: Ralph Stair, George Reynolds