WORKSHOP

PROBLEM 1
• On the basis of expected rate, standard deviation, variance, and
coefficient of variation decided which of the following company is
best for investment ?
• SOLUTION
• SOLUTION
• SOLUTION
• On the basis of above mention risk indicators Company H is the ideal
investment.
WORKSHOP
PROBLEM 2
• Find the expected rate of return:
Probability Return Probability Return
20% -24% 10% -10%

30% 0 20% -5%

30% 5% 50% 15%

20% 25% 20% 10%

SOLUTION 1: SOLUTION 2:
R=.2(0.24)+.3(0)+.3(0.05)+.2(0.25) R=.1(0.10)+.2(0.05)+.5(0.15)+.2(0.10)
=1.70% =7.50%