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    Evaluating Stand-Alone Risk

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    Conestoga Ltd. has the following estimated probability distribution of returns.

    Return Probability
    4% .20
    12 .50
    14 .30

    Calculate Conestoga's expected return, the variance and standard deviation of its expected return, and the return's coefficient of variation.

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    Solution Summary

    This solution illustrates how to compute the expected return, variance, standard deviation, and coefficient of variation when returns are expressed as a probability distribution.