Answer Happy

General Meters is considering two mergers. The first is with Firm A in its own volatile industry, the auto speedometer industry, while the second is a merger with Firm B in an industry that moves in the opposite direction (and will tend to level out performance due to negative correlation). General Meters Merger with Firm A Possible Earnings (5 in millions) $.40 80 120 Probability 0.40 0.40 0.20 General Meters Merger with Firm B Mean Standard deviation Coefficient of variation Possible Earnings ($ in millions) $.40 80 120 a. Compute the mean, standard deviation, and coefficient of variation for both investments. (Do not round intermediate calculations. Enter your answers in millions. Round "Coefficient of variation" to 3 decimal places and "Standard deviation to 2 decimal places) Probability 0.35 0.50 0.15 Merger A Merger B b. Assuming investors are risk-averse, which alternative can be expected to bring the higher valuation? O Merger A O Merger B Check my work