P8-6

CHAPTER 8 Risk and Return 351 given code names. After market research, the firm has established the expectations shown in the following table about the annual rates of return. Annual rate of return Market acceptance Probability LineJ Line K Very poor Poor Average Good Excellent 0.05 0.15 0.60 0.15 0.14750.135 0.05 0.1625 0.150 0.0075 0.010 0.0125 0.025 0.0850 0.080 Use the table to: a. Construct a bar chart for each line's annual rate of return. b. Calculate the expected value of return for each line c. Evaluate the relative riskiness for each jean line's rate of return using the bar charts. the eaxpectd vu o e i P8-7 Coefficient of variation Metal Manufacturing has isolated four alternatives for increed nroduction capacity. The following table summarizes