Reference no: EM131973246

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  Possible Earnings

($ in millions) ($ in millions)

Probability Probability

$ 40    .30     $ 40    .25        

60    .40     60    .50

80    .30     80    .25  

a. Compute the mean, standard deviation, and coefficient of variation for both investments. (Enter your answers in millions. Do not round intermediate calculations. Round "Coefficient of variation" to 3 decimal places and "Standard deviation" to 2 decimal places.)

Merger A Merger B

Mean

Standard Deviation _______ _______

Coefficient of Variation _______ _______