if using excel please show formulas so i know how to do.
Expected return=Respective return*Respective probability
=(0.2*-50)+(0.1*-10)+(0.4*17)+(0.2*20)+(0.1*49)=4.7%
Probability | REturn | Probability*(Return-Mean)^2 |
0.2 | -50 | 0.2*(-50-4.7)^2=598.418 |
0.1 | -10 | 0.1(-10-4.7)^2=21.609 |
0.4 | 17 | 0.4*(17-4.7)^2=60.516 |
0.2 | 20 | 0.2*(20-4.7)^2=46.818 |
0.1 | 49 | 0.1*(49-4.7)^2=196.249 |
Total=923.61 |
Standard deviation=[Total Probability*(Return-Mean)^2/Total Probability][^(1/2)
=30.39%(Approx)
Coefficient of variation=Standard deviation/mean
=(30.39/4.7)=6.47(Approx).
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