Question: Related to Checkpoint 12) (Computing the standard deviation for an individual investment) James Fromholtz is considering whether to best in a newly formed investment fund


Related to Checkpoint 12) (Computing the standard deviation for an individual investment) James Fromholtz is considering whether to best in a newly formed investment fund The fund investment bjective is to acquire home mortgage securities at what it hopes will be bargain prices. The fund sponsor has suggested to James that the funds performance winge on how the national economy performs in the coming year. Specifically, he wggested the following possible outcomes Based on these potential outcomes, what is your estimate of the expected rate of return from the investment opportunity b. Calculate the standard deviation in the anticipated returns found in parta 5. Would you be interested in making such an investment? Note tisat you lose all your money in one year i the economy collapses mo the worst state or you deable your money in the economy enters into a rapid expansion 2. The expected rate of return from this imesement opportunity to Roand the decimal places) b. The investment's standard deviation Round to ideal places Would you be interested in making such an investment? Select the best choice halom) OAN I would not be interested in making such an investment. The economy is mostly to sito a depression On Your internet in making such an investment gold depend on your dik orance you do not the link you should my in investment how we do not mod you may want to make me een Time Running Next depend on your risk tolerance If you do not like risk you should avoid this investment however it you do not mind risk investment OC. Yes I would be interested in making such an investment The economy is most likely to begin a rapid expansion and recovery O Time Remar Vent und the fund Hall Tips will be bargain prices. The fund sponsor has suggested to James that the fund's performance will hinge on how the national econom sted the following possible outcomes what is he anticip uch an in Data table - X your money If the economy State of Economy Probability Rapid expansion and recovery 15% Modest growth 50% Continued recession 20% Falls into depression 15% (Click on the icon in order to copy its contents into a spreadshot.) Fund Returns 100% 40% 10% 100% ch an in Baking s vestme bt mind risk you may want to Print Done ng such 0 Time Remaining: 02.06.3
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