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Problem A Jean plans to invest in $100,000 in Amazon stocks. One year later, the expected market value of Amazon, based on the state of
Problem A Jean plans to invest in $100,000 in Amazon stocks. One year later, the expected market value of Amazon, based on the state of the economy, is given below. Probability are as follows: Recession: 10% Slowdown: 20% Base/Average: 40% Upturn: 20% Boom: 10% State of Economy Recession Exp. Market Returns Probability Value (r.) (p:) 70,000 EXP. RETURN (p x r.) Slowdown 90,000 Base/Average 120,000 Upturn 140,000 Boom 160,000 Expected Return Requirement: 1. What is the expected return of the Amazon stock? Fill in the table above as you solve for this. 2. What is the variance of the rate of return? 3. What is the standard deviation? 4. What is the coefficient of variation
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