Question

Questions Problem 01 Question 3 of 11 Check My Work (3 remaining) O Click here to read the eBook: Stand-Alone Risk EXPECTED RETURN A stock's returns have the following distribution: Demand for the Probability of this Rate of Return If Company's Products Demand Occurring This Demand Occurs Weak 0.1 (34%) Below average (12) Average Above average 0.3 Strong 55 0.4 a. Calculate the stock's expected return. Round your answer to two decimal places b. Calculate the stock's standard deviation. Do not round intermediate calculations. Round your answer to two decimal places. c. Calculate the stock's coefficient of variation. Round your answer to two decimal places Check My Work (3 remaining)

Answer 1

A) Expected return = Probablity1 × weight1+ ..... + probability(n) × weight (n)

= 0.1 × (34%) + 0.1 × (12%) + 0.4 × 13 + 0.3 × 27% + 0.1 × 55%

= (3.4%) + (1.2%) + 5.2% + 8.1% + 5.5%

= 14.2%

B)

C) Coefficient of variation = Standard deviation / mean

X-X (-) (317 (3.1) 6.24 38.9316 12) (1.2) (4.012) 16.3216 5.5696 27.6676 7.0756 E395.5720 Prob Retn O.1 O.) 5.29 3 2.36% 0.4 5.26/ 0.3 277 g.17 2.667 0.) 5.57 /s XB(3.17)+ 1.2)5.27t g.17.+ 5.5% 14.2%/5 2.B47 をメーズ) n-1 95.5320 Jas 95.5720 L23.8930 4.8880

= 4.89% / 2.84%

= 1.72