An Investment Has the Following Range of Outcomes and Probabilities

question 21

Essay

An investment has the following range of outcomes and probabilities.
$\begin{array}{cc}\underline{\text { Outcomes (Percent)}}&\underline{\text { Probabilities of Outcomes }}\\5 \% & .25 \\7 \% & .50 \\12 \% & .25\end{array}$
Calculate the expected value and the standard deviation (round to two places after the decimal point where necessary).

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Definitions:

NICs

Newly Industrialized Countries; nations that are experiencing rapid economic growth and industrialization, often with significant technological advancement.

LDCs

Stands for Least Developed Countries, which are countries that the United Nations has identified as showing the lowest indicators of socioeconomic development.

Economic Growth

Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time.

Health Care Costs

The expenses associated with medical services, treatments, and drugs required to maintain an individual's health.