Question

eBook Problem 6-05 Expected Return: Discrete Distribution A stock's return has the following distribution: Demand for the Company's Products Probability of This Demand Occurring Rate of Return if This Demand Occurs (%) Weak 0.1 -40% Below average 0.2 Average 0.4 Above average 0.2 Strong 0.1 1.0 Calculate the stock's expected return. Round your answer to two decimal places. % Calculate the standard deviation. Round your answer to two decimal places.

Answer 1

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STATS -Microsoft Excel (Product Activation Failed) Review File Home Insert Page Layout Formulas Data View Add-Ins E AutoSum Cut A A Wrap Text Calibri 11 General ECopy Fill Merge & Center Paste +.0 .00 Conditional Format Cell Insert Delete Format Sort & Find & Filter Select BIU A % .00 0 Format Painter Clear Formatting as Table Styles Number Clipboard Font Alignment Styles Cells Editing fc CO575 CL CK CM CN CO CP CO 560 561 demand rate of EXPECTED 562 prob RETURN SQUARED VARIANCE DEVIATION (S) DEVIATION (T) return (R) 563 RETURN S S P*T P*Q (R-E(R) R-14.30 564 P weak 294.8490 565 0.1 -40 -4 -54.300 2948.49 below average 566 0.2 -6 -1.2 -20.300 412.09 82.4180 -4,300 7.3960 567 0.4 10 4 18.49 average above average 132.0980 568 0.2 40 25.700 660.49 368.4490 569 0.1 75 7.5 60.700 3684.49 strong E(R) 570 14.300 VARIANCE 885.2100 571 572 STOCK'S EXPECTED RETURN = 14.30% 573 ANSWER 574 SQRT (VARIANCE) STANDARD DEVIATION = 575 SQRT (885.2100) 576 STANDARD DEVIATION = 577 29.75% ANSWER STANDARD DEVIATION = 578 579 coo ΗΥΡΟΤΗΠ m EMV MEAN STDV assignment TREND freq DEAR Sheet2 COV corr REGRESSION PV FV DIVIDEND TIME SERIES MATRIX INTERVAL, NORMAL range CAMERA Rea erences 120% WA 00:15 ENG 21-11-2019