Question
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
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 | (28%) |
| Below average | 0.2 | (6) |
| Average | 0.4 | 18 |
| Above average | 0.1 | 34 |
| Strong | 0.2 | 56 |
| 1.0 |
Assume the risk-free rate is 2%. Calculate the stock's expected return, standard deviation, coefficient of variation, and Sharpe ratio. Do not round intermediate calculations. Round your answers to two decimal places.
Stock's expected return: %
Standard deviation: %
Coefficient of variation:
Sharpe ratio:
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Multinational Finance Evaluating The Opportunities Costs And Risks Of Multinational Operations
Authors: Kirt C. Butler
6th Edition
111921968X, 978-1119219682
