In: Finance
Possible outcomes for three investment alternatives and their
probabilities of occurrence are given
next.
Alternative 1 | Alternative 2 | Alternative 3 | ||||||||||||||||||
Outcomes | Probability | Outcomes | Probability | Outcomes | Probability | |||||||||||||||
Failure | 40 | 0.20 | 70 | 0.20 | 75 | 0.40 | ||||||||||||||
Acceptable | 80 | 0.20 | 140 | 0.20 | 255 | 0.40 | ||||||||||||||
Successful | 135 | 0.60 | 205 | 0.60 | 405 | 0.20 | ||||||||||||||
Using the coefficient of variation, rank the three alternatives in
terms of risk from lowest to highest. (Do not round
intermediate calculations. Round your answers to 3 decimal
places.)
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -