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Q18. Stocks X and Y have the following probability distributions of expected future distribution returns: Probability 0.1 0.2 0.4 0.2 0.1 -17% 2 12 Y
Q18. Stocks X and Y have the following probability distributions of expected future distribution returns: Probability 0.1 0.2 0.4 0.2 0.1 -17% 2 12 Y -23% 0 21 26 36 22 24 a. Calculate the expected rate of return for Stock X and Y (1 mark) b. Calculate the standard deviation of expected returns for Stock X and Y(2 marks) c. Calculate the coefficient of variation for Stock X and Y. (1 mark) d. Calculate the expected rate of return and standard deviation of a portfolio comprising 35% investment in Stock X and the remainder in Stock Y. (2 marks)
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