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You have the opportunity to purchase a MLB Franchise. The probability distribution of expected returns for the franchise is as follows:

You have the opportunity to purchase a MLB Franchise. The probability distribution of expected returns for the franchise is as follows:

Probability Rate of Return

0.1 –20%

0.2 0%

0.4 7%

0.2 15%

0.1 25%

The expected rate of return for your investment in the MLB Franchise is____Expected rate of return = ∑Piki. The standard deviation is_____.

## Answers ( )

Answer:The expected rate of return is 6.3%.

The standard deviation is of 11.29%.

Step-by-step explanation:Expected rate of returnMultiply each rate by its probability. So

The expected rate of return is 6.3%.

Standard deviation:Square root of the difference squared between each value and the mean, multiplied by the probability. So

The standard deviation is of 11.29%.