Hi, Please find the answers as follows: Part A: Expected Return = .1*-10 + .2*0 + .4*10 + .2*20 + .1*30 = 10% Part B: Variance = .1*(-10 - 10)^2 + .2*(0 - 10)^2 + .4*(10 - 10)^2 + .2*(20 - 10)^2 + .1*(30 -10)^2 = 120 Standard Deviation = (120)^1/2 = 10.95% Part C: Coeffcient of Variation = Standard Deviation/Expected Return = 10.95/10 = 1.095 Part D: Stand Alone Risk is measured by th Standard Deviation or Coefficient of variation (CV) of returns. Part E: Stand Alone Risk reflects the uncertainty about the cash flows. It is relevant when the the undiversified risk of an individual asset is required to be measured. Thanks. Solution Hi, Please find the answers as follows: Part A: Expected Return = .1*-10 + .2*0 + .4*10 + .2*20 + .1*30 = 10% Part B: Variance = .1*(-10 - 10)^2 + .2*(0 - 10)^2 + .4*(10 - 10)^2 + .2*(20 - 10)^2 + .1*(30 -10)^2 = 120 Standard Deviation = (120)^1/2 = 10.95% Part C: Coeffcient of Variation = Standard Deviation/Expected Return = 10.95/10 = 1.095 Part D: Stand Alone Risk is measured by th Standard Deviation or Coefficient of variation (CV) of returns. Part E: Stand Alone Risk reflects the uncertainty about the cash flows. It is relevant when the the undiversified risk of an individual asset is required to be measured. Thanks..

1. Hi,
Please find the answers as follows:
Part A:
Expected Return = .1*-10 + .2*0 + .4*10 + .2*20 + .1*30 = 10%
Part B:
Variance = .1*(-10 - 10)^2 + .2*(0 - 10)^2 + .4*(10 - 10)^2 + .2*(20 - 10)^2 + .1*(30 -10)^2 =
120
Standard Deviation = (120)^1/2 = 10.95%
Part C:
Coeffcient of Variation = Standard Deviation/Expected Return = 10.95/10 = 1.095
Part D:
Stand Alone Risk is measured by th Standard Deviation or Coefficient of variation (CV) of
returns.

2. Part E:
Stand Alone Risk reflects the uncertainty about the cash flows. It is relevant when the the
undiversified risk of an individual asset is required to be measured.
Thanks.
Solution
Hi,
Please find the answers as follows:
Part A:
Expected Return = .1*-10 + .2*0 + .4*10 + .2*20 + .1*30 = 10%
Part B:
Variance = .1*(-10 - 10)^2 + .2*(0 - 10)^2 + .4*(10 - 10)^2 + .2*(20 - 10)^2 + .1*(30 -10)^2 =
120
Standard Deviation = (120)^1/2 = 10.95%
Part C:

3. Coeffcient of Variation = Standard Deviation/Expected Return = 10.95/10 = 1.095
Part D:
Stand Alone Risk is measured by th Standard Deviation or Coefficient of variation (CV) of
returns.
Part E:
Stand Alone Risk reflects the uncertainty about the cash flows. It is relevant when the the
undiversified risk of an individual asset is required to be measured.
Thanks.