Question

A stock’s return has the distribution below. Calculate the stock’s coefficient of variation, expressed to one decimal. (Note: you can use your answers from the two problems above to find the CV.)

Demand for Products	Probability of Demand Occurring	Rate of Return if Demand Occurs
Weak	0.1	-30%
Below Average	0.1	-14%
Average	0.3	11%
Above Average	0.3	20%
Strong	0.2	45%

Answer 1

Solotoni o coefficient of Valea ton standard deviation expected return Er calallation of Mean Cern) and Standard deviation Expected return (R) (RR)? (R-R) Demand ReturnsCR) probability CP) 1927.21 192.12 -43.90 - 3 0.10 - 30 Weak -14 21.90 17.8.41 11.84 0.10 - 14 Below ang 3.30 2.90 841 2.523 Average 0.30 11 6 6.10 37.21 11:163 0.30 20 Above Arg 31.10 967.21 193.442 9 strong 0:20 45 s(P) 13-90 EPCR-RI ² = 477.69 Sum of probable de terns expected return e(r) = 13.90% standard devia hon (0) - EPCR-D2 471.69 21.86% T = 21.86 . 1.5726 lm Erl 13.90 coefferent of valuation 1.572 1.57 CV =