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Questions 2: Problem solving (55 points) Stock C Rate of Return Probability (p) 12 % 30 % or 0.30 9 % 50 % or 0.50
Questions 2: Problem solving (55 points) Stock C Rate of Return Probability (p) 12 % 30 % or 0.30 9 % 50 % or 0.50 -8% 10 % or 0.10 The Economic Status Optimistic Most Likely Pessimistic 1. Calculate the Expected Rate of Return E(r) for Stock C. (20 points) 2. Calculate Variance and Standard Deviation for Stock C. (25 points) 3. Calculate the Sharpe Ratio, assuming risk free rate is 4%. (10 points)
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