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1. What is the coefficient of variation of the following income statement sales projection given the...

1.

What is the coefficient of variation of the following income statement sales projection given the following information?

            Possible Sales Level (in 000’s)         Probability

            1000                                                    10%

            2000                                                    15%

            2500                                                    50%

            2800                                                    20%

                         3000                                                    5%  

  • A.1.41
  • B.12%
  • C.0.22
  • D.1.81

2. The expected mean of the normal probability distribution of possible returns for XYZ Corporation is 15%. The standard deviation is 2%. Calculate the range of possible values allowing you a 68% confidence interval around the expected return.

  • A. 13-17
  • B. 11-19
  • C. 14-16
  • D. 10-20

3.

Given the following probability distributions of assets X and Y returns.

Prob. X's return Y's return
25% 10% 12%
25% 12 16
25% 14 20
25% 16 24
Find asset X's expected return and standard deviation.

  • A. 13; 2.247
  • B. 13; 2.236
  • C. 13; 2.427
  • D. 13; 2.326
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