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EXPECTED RETURNA stocks returns have the following distribution: Demand for the Companys Products Probability of this Demand Occurring Rate of Return if this Demand Occurs
EXPECTED RETURNA stocks returns have the following distribution:
Demand for the Companys Products
Probability of this Demand Occurring
Rate of Return if this Demand Occurs
Weak
0.1
(30%)
Below average
0.1
(14)
Average
0.3
11
Above average
0.3
20
Strong
0.2
45
1.0
Assume the risk-free rate is 2%. Calculate the stocks expected return, standard deviation, coefficient of variation, and Sharpe ratio.
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