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stranahan stranahan
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7 years ago
Denard has two investment opportunities. He can invest in The Sunglasses Company or The Umbrella Company. What is the expected return and standard deviation of each company?

State of the Economy   Probability of the State   Expected Return Sunglasses Company   Expected Return
Umbrella Company
Sunny   .50   25%   0%
Rainy   .50   0%   25%

A) The expected return for each company is 12.50% and the standard deviation for each company is 156.25%.
B) The expected return for each company is 12.50% and the standard deviation for each company is 0.00%.
C) The expected return for each company is 12.50% and the standard deviation for each company is 25.00%.
D) The expected return for each company is 12.50% and the standard deviation for each company is 12.50%.
Textbook 
Financial Management: Core Concepts

Financial Management: Core Concepts


Edition: 2nd
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Awful_HomieAwful_Homie
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7 years ago
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stranahan Author
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#2
7 years ago
Thank you very much for this. It's really helpful.
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