Question

State Boom Normal Growth Recession Probability 28 23 49 Return 535 20 17 Find the expected return on the stock market. O.2624 O.1125 O2791 O.0958 6.25 points Save Answer QUESTION 4 What is the standard deviation of the market's expected return? Round intermediate steps and your final answer to four decimals and enter your answer in decimal format 6.25 points Save Answer QUESTION 5 Find the coefficient of variation. Round intermediate steps and your final answer to four decimals

Answer 1

Solution 3
Scenario	Probability	Retrun	Retrun* Probability	Deviation=Return-Expected return	Deviation^2	Probability*Deviation^2
Boom	0.2800	0.5350	0.1498	0.4225	0.1785	0.0500
Normal Growth	0.2300	0.2000	0.0460	0.0875	0.0077	0.0018
Recession	0.4900	(0.1700)	(0.0833)	(0.2825)	0.0798	0.0391
		Total	0.1125		Total	0.0908
So expected return is 11.25%
So option 2 is correct
Solution 4
Stock variance	0.0908
Stock Standard deviation	'9.0847%^(0.5)
Stock Standard deviation	0.3014
Solution 5
Co-efficient of variation=	Standard Deviation*100/Mean
Co-efficient of variation=	'0.301409*100/0.1125
Co-efficient of variation=	267.9196