Expected return of stock E(r) = p(s)*r(s),
where p(s) is the probability of each scenario,
and r(s) is the expected return of each scenario.
Variance of stock 2 = p(s)*[r(s) - E(r)]2
where [r(s) - E(r)]2 is the squared deviation from the expected return.
Standard deviation = variance
The expected return E(r) and standard deviation are calculated as below :
2- You have estimated the following probability distributions of expected future returns for Stocks X and...
Stocks X and Y have the following probability distributions of expected future returns: Probability X Y 0.1 -10.0% -35.0% 0.2 2.0% 0.0% 0.4 12.0% 20.0% 0.2 20.0% 25.0% 0.1 34.0% 45.0% Calculate the expected rate of return,� , for Stock X A. 12.20 B. 11.20 C. 12.00 D. 11.60
8-6 EXPECTED RETURNS Stocks A and B have the following probability distributions of expected future returns: Probability B 0.1 0.2 A (10%) 2 12 20 38 (35%) 0 20 0.4 0.2 0.1 45 a. Calculate the expected rate of return, fe, for Stock B (f = 12%). b. Calculate the standard deviation of expected returns, o , for Stock A (o, = 20.35%). Now calculate the coefficient of variation for Stock B. Is it possible that most investors will regard...
Stocks X and Y have the following probability distributions of expected future returns: Probability 0.1 0.2 0.4 0.2 0.1 (10%) 2 12 20 48 (35%) 0 20 25 What are the expected returns of both X and Y? O 12% and 15% 13% and 14% 13% and 16% 13% and 15% 12% and 14%
Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (13 %) (37 %) 0.1 6 0 0.5 10 18 0.2 22 28 0.1 38 35 A.Calculate the expected rate of return,rb , for Stock B (rA = 12.50%.) Do not round intermediate calculations. Round your answer to two decimal places. B. Calculate the standard deviation of expected returns, σA, for Stock A (σB = 19.26%.) Do not round intermediate calculations. Round your...
Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (7 %) (28 %) 0.2 5 0 0.4 15 18 0.2 22 28 0.1 29 46 Calculate the expected rate of return, , for Stock B ( = 13.60%.) Do not round intermediate calculations. Round your answer to two decimal places. Calculate the standard deviation of expected returns, σA, for Stock A (σB = 19.06%.) Do not round intermediate calculations. Round your answer...
Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (5 %) (37 %) 0.1 3 0 0.6 14 21 0.1 20 29 0.1 31 45 Calculate the expected rate of return, , for Stock B ( = 13.30%.) Do not round intermediate calculations. Round your answer to two decimal places. % Calculate the standard deviation of expected returns, σA, for Stock A (σB = 20.55%.) Do not round intermediate calculations. Round your...
EXPECTED RETURNS Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (13%) (35%) 0.2 5 0 0.3 12 20 0.3 18 29 0.1 38 38 Calculate the expected rate of return, rB, for Stock B (rA = 12.50%.) Do not round intermediate calculations. Round your answer to two decimal places. % Calculate the standard deviation of expected returns, σA, for Stock A (σB = 20.35%.) Do not round intermediate calculations. Round your...
EXPECTED RETURNS Stocks A and B have the following probability distributions of expected future returns: Probability 0.1 (38%) 0.2 0.2 0.1 a. Calculate the expected rate of return, re, for Stock B (rA = 12.00%.) Do not round intermediate calculations. Round your answer to two decimal places. b. Calculate the standard deviation of expected returns, OA, for Stock A (OB = 20.49%.) Do not round intermediate calculations. Round your answer to two decimal places. % c. Now calculate the coefficient...
Stocks A and B have the following probability distributions of expected future returns: Probability A B .1 (13%) (40%) .1 5 0 .5 15 21 .2 22 30 .1 33 48 a.) Calculate the expected rate of return for Stock B ( = 14.40%.) Do not round intermediate calculations. Round your answer to two decimal places. b.) Calculate the standard deviation of expected returns, σA, for Stock A (σB = 22.17%.) Do not round intermediate calculations. Round your answer to...
Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.2 (9%) (22%) 0.2 5 0 0.3 11 20 0.2 20 30 0.1 40 36 A- Calculate the expected rate of return, rB, for Stock B (rA = 10.50%.) Do not round intermediate calculations. Round your answer to two decimal places. % B- Calculate the standard deviation of expected returns, σA, for Stock A (σB = 20.02%.) Do not round intermediate calculations. Round your...