Rate of Return Stock A Probability (p) (r) The Economic Status Optimistic Most Likely 15% 25% or 0.25 11% 65% or 0.65 Pessimistic -8% 10% or 0.10 1. Calculate the Expected Rate of Return E(r) for Stock F. (20 points) 2. Calculate Variance and Standard Deviation for Stock F. (25 points) 3. Calculate the Sharpe Ratio, assuming risk free rate is 5%. (10 points) Bonus Question: (5 points - each 1.25 points) 1. Corporation as a form of businesses with no government regulations CopyDght American College of the Middle East, 2020 2. Present value concept states that an amount of money today is worth more than that same amount in the future. ( ) 3. Inflation is the process in which prices for goods and services is rising. ( ) 4. Finance is concerned with preparation of financial statements ( )