FIN2601 Assignment 2 Semester 1 2023

FIN 2601
ASSIGNMENT 2 SEMESTER 1 2023



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,The financial manager of Blackbelt Technologies wishes to determine the standard deviation from a
proposed investment project. The expected returns from the project are related to the future
performance of the economy over the period, as follows:

Economic scenario Probability of occurrence Rate of return
Strong growth 0,25 15%
Moderate growth 0,50 12%
Low growth 0,25 8%


What is the standard deviation of the proposed investment project?




1.
2,49%



2.
3,43%


3. 6,19%



4.
11,75%



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, Question 2
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Tiny Legend Learning Academy believes the probability distribution, shown below, holds true for its
shares.

State of the economy Probability of state Shares’ expected return
occurring
Strong growth 0,25 20%
Moderate growth 0,50 12%
Low growth 0,25 8%


What is the coefficient of variation on the corporation shares?




1. 0,23



2.
0,34


3. 2,83



4.
4,36



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