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Calculate the expected rate of return, r B , for Stock B (r A = 10.70%.) Do not round intermediate calculations. Round your answer to
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Calculate the expected rate of return, rB, for Stock B (rA = 10.70%.) Do not round intermediate calculations. Round your answer to two decimal places. %
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Calculate the standard deviation of expected returns, A, for Stock A (B = 25.35%.) Do not round intermediate calculations. Round your answer to two decimal places. %
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Now calculate the coefficient of variation for Stock B. Round your answer to two decimal places.
Expected returns
Stocks A and B have the following probability distributions of expected future returns:
Probability | A | B |
0.2 | -6% | -33% |
0.2 | 4 | 0 |
0.3 | 12 | 24 |
0.2 | 21 | 29 |
0.1 | 33 | 45 |
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