# Occurrence dev from er very poor 01 0 0 0 very 1552

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Occurrence Dev from E(R) Very poor 0.1 0% 0 0 Very poor 0.1 -39% 1552 155 Very poor 0.1 26% 690 69 Poor 0.2 0% 0 0 Poor 0.2 -19% 376 75 Poor 0.2 13% 168 34 Average 0.4 0% 0 0 Average 0.4 3% 7 3 Average 0.4 -2% 3 1 Good 0.2 0% 0 0 Good 0.2 18% 310 62 Good 0.2 -12% 138 28 Very good 0.1 0% 0 0 Very good 0.1 33% 1063 106 Very good 0.1 -22% 473 47 1.00 Sum = Variance = 0 1.00 Sum = Variance = 401 1.00 Sum = Variance = 179 Standard deviation = Square root of variance = 0.00% Standard deviation = Square root of variance = 20.04% Standard deviation = Square root of variance = 13.36% OR the SQRT and SUMPRODUCT functions can be used: 0.00% OR the SQRT and SUMPRODUCT functions can be used: 20.04 OR the SQRT and SUMPRODUCT functions can be used: 13.36 State of the Probability of Am Foam State of the Probability of Market Port State of the Probability of BC Economy Occurrence Dev from E(R) Economy Occurrence Dev from E(R) Economy Occurrence Dev from E(R) Very poor 0.1 -4% 14 1 Very poor 0.1 -28% 784 78 Very poor 0.1 -7% 43 4 Poor 0.2 -24% 566 113 Poor 0.2 -14% 196 39 Poor 0.2 -3% 10 2 Average 0.4 -7% 46 18 Average 0.4 0% 0 0 Average 0.4 0% 0 0 Good 0.2 31% 973 195 Good 0.2 14% 196 39 Good 0.2 3% 9 2 Very good 0.1 16% 262 26 Very good 0.1 28% 784 78 Very good 0.1 5% 29 3 1.00 Sum = Variance = 354 1.00 Sum = Variance = 235 1.00 Sum = Variance = 11 Standard deviation = Square root of variance = 18.82% Standard deviation = Square root of variance = 15.34% Standard deviation = Square root of variance = 3.34% OR the SQRT and SUMPRODUCT functions can be used: 18.82 OR the SQRT and SUMPRODUCT functions can be used: 15.34 OR the SQRT and SUMPRODUCT functions can be used: 3.34 Std. Dev. E(R) CV T-Bills 0.0% 8.0% 0.0 Alta Inds. 20.0% 17.4% 1.2 Repo Men 13.4% 1.7% 7.7 Am Foam 18.8% 13.8% 1.4 Market Port. 15.3% 15.0% 1.0 Alta & Repo 3.3% 9.6% 0.3 Market T-Bills Alta Inds. Repo Men Am Foam Alta & Repo -13.0% 8.00% -22.0% 28.0% 10.0% 3.0% 1.0% 8.00% -2.0% 14.7% -10.0% 6.4% 15.0% 8.00% 20.0% 0.0% 7.0% 10.0% 29.0% 8.00% 35.0% -10.0% 45.0% 12.5% 43.0% 8.00% 50.0% -20.0% 30.0% 15.0% Assume that you recently graduated and you just landed a job as a financial planner with the Cleveland Clinic. Your first assignment is to invest \$100,000. Because the funds are to be invested at the end of one year, you have been instructed to plan for a one-year holding period. Further, your boss has restricted you to the following investment alternatives, shown with their probabilities and associated outcomes.