You are going to invest all your funds in ONE of three projects with the following...

Transcribed Image Text:

You are going to invest all your funds in ONE of three projects with the following distribution of possible return: Project 1 Probability 50% chance 50% chance Project 2 Probability 30% chance 40% chance 30% chance Project 3 Probability 20% chance 40% chance 40% chance Return (%) 20 -4 Return (%) 30 10 -20 Return (%) 30 15 10 From the above information, you are required to answer the following questions. a. Compute for each project: i. the standard deviation ii. the coefficient variation (3 Marks) (3 Marks) b. Based on your computation in part (a), and you are a risk taker investor, which one project should you choose? Explain your answer. (4 Marks) (Total: 10 Marks) You are going to invest all your funds in ONE of three projects with the following distribution of possible return: Project 1 Probability 50% chance 50% chance Project 2 Probability 30% chance 40% chance 30% chance Project 3 Probability 20% chance 40% chance 40% chance Return (%) 20 -4 Return (%) 30 10 -20 Return (%) 30 15 10 From the above information, you are required to answer the following questions. a. Compute for each project: i. the standard deviation ii. the coefficient variation (3 Marks) (3 Marks) b. Based on your computation in part (a), and you are a risk taker investor, which one project should you choose? Explain your answer. (4 Marks) (Total: 10 Marks)

Answer rating: 100% (QA)

To compute the standard deviation and coefficient of variation for each project well use the followi... View the full answer