Question: Swift Manufacturing is evaluating an asset purchase. The annual rate of return and the related probabilities given in the following table summarize the firm's analysis to this point:
| Rate of Return |
Probability |
| 15% |
0.1 |
| 25% |
0.1 |
| 35% |
0.05 |
| 45% |
0.1 |
| 55% |
0.25 |
| 65% |
0.15 |
| 75% |
0.1 |
| 85% |
0.1 |
| 95% |
0.05 |
a. Compute the range of possible rates of return.
b. Compute the expected return.
c. Compute the standard deviation of the returns.
d. Compute the coefficient of variation of the returns.