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Three assets, F, G, and H are currently being considered. The probability distributions of expected retums for these three assets is shown in the table below: Asset F Asset G Asset H Probability RetumProbability |RetumProbability Retum 10 .20 40 .20 10 40% 40 .30 .30 35% 10% -20% 10 .20 40 .20 10 40% 20% 10% 10% -5% -10% -20% a. Calculate the expected value of retum for each of the three assets b. Calculate the standard deviation for each ofthe three assets c. Calculate the coefficient of variation for each ofthe three assets d. Which appears to have the greatest risk?

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Solution CP) 0.10 0.20 0.40 d.lo 4o-U4 o.io (36)2,129.60 O.2oG) 7.20 0.4o(b-4)2 0.2-5-4) 0.30-5l 0.20 (-9,-=16-20 0.lo (-10-4) 0.10 -10 179 1.00 4% (!) Avar Green Rang Return名 //7g . 13.38 = 13. 379 iii) 6_ (Stardana Devicnm)CL ethuent ơA variaHon As.ges RetumProb.xRerumProb. (Re-Av.Ret) (P)x(R) o.4ox35-14 O.3oXlo -3 0.30%-20s( О.yo(刘)多 0.30 ( lo-I) #230.4 D. 3010 0.30(-20-))2 0.30(-31)3 四.30 x961 =ユ88.30 0.30 .00 Av. Exp. Ret - I 519.00 22:78 207 リco Combmte tton 0.10 (u0-l0) 0-10 (30),040x900 0.10 0.20 0.40 0.00 0.10 .00 0 до 4 10. 20 (20-10)ב 20 O.ao xao 20 О.lox-ao--a 0.10.-3D-ID aa0 9Av Ralo 14 831.483 48 11% lo (C) Co ettiuent %33520 Vanahm (b) Stardor dauta13.38 3218 4.83 More Risk 13

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