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2. Quantitative Problem: You are given the following probability distribution for CHC Enterprises: State of Economy Probability Rate of return Strong 0.25 22% Normal 0.5

2. Quantitative Problem: You are given the following probability distribution for CHC Enterprises:

State of Economy Probability Rate of return
Strong 0.25 22%
Normal 0.5 9%
Weak 0.25 -6%

- What is the stock's standard deviation? Round your answer to two decimal places. Do not round intermediate calculations. _____%

- What is the stock's coefficient of variation? Round your answer to two decimal places. Do not round intermediate calculations. ______

5.

A stock's returns have the following distribution:

Demand for the Company's Products Probability of This Demand Occurring Rate of Return If This Demand Occurs
Weak 0.1 (20%)
Below average 0.2 (14)
Average 0.3 15
Above average 0.1 22
Strong 0.3 70
1.0

- Calculate the stock's coefficient of variation. Round your answer to two decimal places.

6. A stock has a required return of 9%; the risk-free rate is 4.5%; and the market risk premium is 4%.

- New stock's required rate of return will be ____%. Round your answer to two decimal places.

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