Standard deviation of the rate of return on investment

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1. A project has a 0.72 chance of doubling your investment in a year and a 0.28 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Standard deviation             %

2. Investors expect the market rate of return this year to be 13.50%. The expected rate of return on a stock with a beta of 1.7 is currently 22.95%. If the market return this year turns out to be 11.20%, how would you revise your expectation of the rate of return on the stock? (Round your answer to 1 decimal place.)

Revised rate of return             %

Reference no: EM131900662

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