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General Meters is considering two mergers. The first is with Firm A in its own volatile...

General Meters is considering two mergers. The first is with Firm A in its own volatile industry, the auto speedometer industry, while the second is a merger with Firm B in an industry that moves in the opposite direction (and will tend to level out performance due to negative correlation). General Meters Merger with Firm A General Meters Merger with Firm B Possible Earnings ($ in millions) Probability Possible Earnings ($ in millions) Probability $ 20 .20 $ 20 .15 65 .40 65 .50 110 .40 110 .35 a. Compute the mean, standard deviation, and coefficient of variation for both investments. (Do not round intermediate calculations. Enter your answers in millions. Round "Coefficient of variation" to 3 decimal places and "Standard deviation" to 2 decimal places.) b. Assuming investors are risk-averse, which alternative can be expected to bring the higher valuation?

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jeff jeffy answered 1 year ago
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