Calculating the expected impact and the standard deviation

Assignment Help Corporate Finance

Reference no: EM1345864

Please help with quantitatively evaluating the following data by calculating the expected impact, the standard deviation, and the coefficient of variation for each risk. Additionally, what do these statistics tell you about the possible risks?

For commodity price risk, there is a 25% chance that oil prices will increase, which would reduce profits by $25,000. However, there is a 25% chance that oil prices will fall significantly, which would increase profits by $50,000. There is also a 50% chance that oil prices will only fall slightly, improving profits by $5,000. With regard to the sovereign risk, there is a 50% chance that the country's government will impose a new tax, which would reduce profits by $50,000, and a 50% chance that no change will be made to the tax code.

Reference no: EM1345864

Questions Cloud

Breakdown of bretton woods system : The experiences of fixed exchange-rate systems and target zone arrangements haven't been entirely satisfactory. What lessons can economists draw from the breakdown of the Bretton Woods system?

Explaining sql insert statement to insert new row in cds : Write down a SQL insert statement to insert new row in "CDS" table.

Dsecribe the importance of communication : Dsecribe the importance of communication in business and explain the common forms of organizational structure and the considerations for selection.

Britain entry in exchange rate mechanism of ems : When Britain announced its entry in the exchange rate mechanism of EMS on October 5, 1990, the price of British gilts (long term government bonds) soared and sterling rose in value.

Calculating the expected impact and the standard deviation : Quantitatively evaluating the following information by computing expected impact, standard deviation, & the coefficient of variation for each risk.

Professional business communication : Show how, in your opinion, the individual's communication skills have been integral to their success and find one example of how the individual you selected has used oral or written communication to their advantage.

Find out the number of revolutions per second : A 1348 kg weather rocket is launched straight up. The rocket motor provides a constant acceleration for 13.6 s, then the motor stops. The rocket altitude 29.6 s after launch is 2091 m. You can avoid any effects of air resistance. What was the rock..

Exchange rate effects on borrowing : Describe how the appreciation of Japanese yen against the U.S. dollar would affect the return to U.S. firm that borrowed Japanese yen and employed the proceeds for the U.S. project.

Designing page to count number of page views in php : Design a page to count number of times page is viewed by a user in single session in PHP/SQL.

User Account

All Pages