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XYZ Company has excess cash flows that could be invested in one or both of...

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Finance

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XYZ Company has excess cash flows that could be invested in one or both of the two securities i and j. Financial manager has estimated four possible states of nature with equal probability, the returns and probability for the two securities are as follows: Probability (P.) Possible rate of return (R) Possible rate of return (R) 0.20 -20.00% 5.00% 0.25 10.00% 20.00% 0.25 30.00% -12.00 0.30 50.00% 9.00% Required: i. For each of the above security, compute expected return, variance and standard deviation. (10 Marks) Activate Go to Setti

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