What is the expected rate of return on the? investment

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Reference no: EM132829867

Universal Corporation is planning to invest in a security that has several possible rates of return. Given the probability distribution of returns:

PROBABILITY               RETURN
?0.05                         -10%
0.15                         10%
0.25                         15%
0.55                          25%

Question 1: What is the expected rate of return on the? investment?

Question 2: Also compute the standard deviation of the returns.

Question 3: What do the resulting numbers? represent?

Reference no: EM132829867

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