Question

12 points) uonsanb Hayek Corporation has a 0.3 probability of a return of 0.66, a 0.3 probability of a rate of return of 0.05, and the remaining probability of a 0.30 rate of return. What is the variance in the expected rate of return of Hayek Corporation? Your Answer:

Answer 1

Ans 565.41

	Probability (P)	RETURN (Y)	(P * Y )	P * (Y -Average Return of Y)^2
	30%	66	19.80	320.20
	30%	5	1.50	240.78
	40%	30	12.00	4.44
		TOTAL	33.30	565.41
Expected Return =		(P * Y)
		33.33%
VARIANCE =		P * (Y -Average Return of Y)^2
		565.4109