Question

Shack Homebuilders Limited is evaluating a new promotional campaign that could increase home sales. Possible outcomes and probabilities of the outcomes are shown next.     

Possible Outcomes	Additional Sales in Units			Probabilities
Ineffective campaign		50			0.70
Normal response		100			0.20
Extremely effective		150			0.10

Compute the coefficient of variation. (Do not round intermediate calculations. Round your answer to 3 decimal places.)

Coefficient Variation _____

Tim Trepid is highly risk-averse while Mike Macho actually enjoys taking a risk.

Investments	Returns: Expected Value			Standard Deviation
Buy stocks	$	9,310		$	5,760
Buy bonds		7,350			2,080
Buy commodity futures		17,400			25,400
Buy options		20,400			14,100

a-1. Compute the coefficients of variation. (Round your answers to 3 decimal places.)

Buy Stocks _______

Buy Bonds _______

Buy commodity futures ______

Buy options ______

Mountain Ski Corp. was set up to take large risks and is willing to take the greatest risk possible. Lakeway Train Co. is more typical of the average corporation and is risk-averse.

Projects	Returns: Expected Value			Standard Deviation
A	$	336,000		$	209,000
B		768,000			461,000
C		150,000			121,000
D		200,000			278,000

a-1. Compute the coefficients of variation. (Round your answers to 3 decimal places.)

Project A _____

Project B _____

Project C _____

Project D _____

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

? v . ** 03:02 ENG 22-02-202014 : fic KN238 KL * KM KN KO KP KQ KR KS KT KU KV . 218 221 POSSIBLE OUTCOMES ADDITIONAL SALES INEFFECTIVE CAMPAIGN 50 NORMAL RESPONSE EXTERMELY EFFECTIVE 150 EXPECTED SALES 100 PROB SP 0.7 0.2 0.1 E(S) = VARIANCE = STANDARD DEVIATION = VARIANCE P*(S-E(S))^2 280 180 640 1100 33.1662 [SQRT(VARIANCE)] [SQRT(1100) 230 232 ANSWER COEEFICIENT OF VARIATION = STANDARD DEVIATION/EXPECTED SALES COEEFICIENT OF VARIATION = 0.474 (33.1662/70] 236 237 238 239 240 241 ... MEAN STDV assignment DEAR prob sd cov TIME SERIES corr REGRESSION range CAMERA TREND freq INTERVAL, NORMAL MATRIX HYPO ... :

? v I . * 03-07 ENG 22-02-2020 14 fix KR257 KL 236 237 X KM KN KO KR ks KT Ku KV - KP KQ RETURNS EXPECTED STANDARD VALUE DEVIATION 238 INVESTMENTS 239 240 BUY STOCKS BUY BONDS BUY FUTURES BUY OPTIONS 241 9310 7350 17400 20400 COEFFICIENT OF VARIATION Q/P 0.619 0.283 TIM WILL GO WITH THIS 1.460 MIKE WILL GO WITH THIS 0.691 5760 2080 25400 242 14100 243 244 245 RETURNS EXPECTED STANDARD VALUE DEVIATION PROJECT 246 247 248 249 250 336000 768000 150000 200000 209000 461000 121000 278000 COEFFICIENT OF VARIATION Q/P 0.622 0.600 0.807 1.390 251 252 253 254 255 MOUNTAIN SKI CORP WANTS TO GO WITH HIGHEST RISK SELECT PROJECT D 257 258 259 LAKEWAY TRAI CO IS RISK AVERSE SELECT PROJECT B ... MEAN STDV assignment DEAR prob sd cov TIME SERIES corr REGRESSION range CAMERA TREND freq INTERVAL, NORMAL MATRIX HYPO ... :