Handbook of Research on Financial Management During Economic Downturn and Recovery
Exam study book Handbook of Research on Financial Management During Economic Downturn and Recovery of Teixeira, Nuno Miguel, Lisboa, Inês - ISBN: 9781799866442 (ALL YOU NEED)
The manager of Carson Inc. predicts that the economy will be either strong,
normal, or weak during the course of the upcoming year, and that the company's
returns will follow the probability distribution displayed below.
Economic scenario Probability of occurrence Rate of return
Strong 30% 32%
Normal 40% 10%
Weak 30% –16%
What is the standard deviation of the estimated returns?
1. 17,69%
2. 18,62%
3. 19,55%
4. 20,52%
Clear my choice
1 of 5 8/5/2023, 2:30
,Assessment 2 (page 1 of 3) https://mymodules.dtls.unisa.ac.za/mod/quiz/attempt.php?attempt=11
Question 2
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Space Software is considering an investment in new software that detects
malware threats in the �nancial industry. Two possible types of expansion are
under review. After investigating the possible outcomes, the company made the
estimates shown in the following table. The pessimistic and optimistic outcomes
occur with a probability of 20% and 25%, respectively, and the most likely
outcome occurs with a probability of 55%.
Project S Project D
Annual returns
Pessimistic 12% 8%
Most likely 18% 20%
Optimistic 25% 40%
You are required to calculate the coe�cient of variation for these two projects.
1. Project S = 0,04; Project D = 0,11
2. Project S = 0,19; Project D = 0,23
3. Project S = 0,89; Project D = 0,21
4. Project S = 0,24; Project D = 0,49
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Question 3
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What is the investment expected return if the following anticipated returns are
expected?
Outcome Probability Return
Strong economy 30% 20%
Normal economy 50% 12%
Weak economy 20% –2%
1. 10,4%
2. 12,4%
3. 11,6%
4. 16,0%
Clear my choice
2 of 5 8/5/2023, 2:30
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