FIN2601 Assignment 2 (QUALITY ANSWERS) Semester 2 2024
Question 1 Complete Mark 1.00 out of 1.00 QUIZ The financial manager of Summer Financial Group is tasked with evaluating the standard deviation of a proposed investment project. This analysis aims to provide insights into the potential risk as...
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FIN2601
Assignment 2 Semester 2
2024
, FIN2601
Assignment 2 Semester 2 2024
QUIZ
Question 1
The financial manager of Summer Financial Group is tasked with evaluating the standard deviation of a
proposed investment project. This analysis aims to provide insights into the potential risk associated
with the project's expected returns, which are linked to the future performance of the economy over a
specific period as follows:
Economic Scenario Probability of Occurrence Rate of
Return
Recession 0.1 20%
Normal 0.6 13%
Boom 0.3 17%
What is the standard deviation of the proposed investment project?
1. 7.07%
2. 10.45%
3. 15.81%
4. 18.67%
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