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Consider the following table for Stocks A and B Economy Probability of Return Return on A Return on B Good 25% 15% 20% Normal 45%
Consider the following table for Stocks A and B
Economy | Probability of Return | Return on A | Return on B |
Good | 25% | 15% | 20% |
Normal | 45% | 10% | 8% |
Bad | 30% | 5% | -10% |
Calculate the following and show calculations/calculator keys
a. Expected return, Standard Deviation, and Coefficient of Variation of Stock A
b. Expected return, Standard Deviation, and Coefficient of Variation of Stock B
c. Which stock is better A or B and why?
d. Expected Return on Portfolio (70% in stock A and 30% in Stock B)
e. Standard Deviation of Portfolio (70% in stock A and 30% in Stock B)
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