hooper chemical company, a major chemical firm that uses such raw materials as carbon and petroleum as part of its production process, is examining a plastics firm to add to its operations. before the acquisition, the normal expected outcomes for the firm are as follows:
outcomes ($ millions)
probability

$20
.30
normal
40
.40
strong
60
.30
after the acquisition, the expected outcomes for the firm would be:
outcomes
($ millions)
probability

$ 10
.3
normal
40
.4
strong
80
.3
compute the coefficient of variation prior to the acquisition. round your answer to 3 decimal places.
additional information for problem 13-23
after the acquisition, these values are as follows:
expected
43.0 ($ millions)
standard
27.2 ($ millions)
coefficient of
.633
does this acquisition appear desirable to you?
a) yes
b) no
do you think the firm's stock price is likely to go up as a result of this acquisition?
a) yes
b) no
if the firm were interested in reducing its risk exposure, which of the following three industries would you advise it to consider for an acquisition?
a)
chemical company
b)
oil company
c)
computer company