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Return (%) Probability 5 0.3 10 0.5 15 0.2 a) Calculate the expected return of an investment given the following probability distribution of returns: (b)
Return (%) | Probability |
---|---|
5 | 0.3 |
10 | 0.5 |
15 | 0.2 |
a) Calculate the expected return of an investment given the following probability distribution of returns:
(b) Calculate the standard deviation of the investment returns using the same probability distribution.
(c) Compare the risk and return of two stocks, Stock X and Stock Y, using their expected returns and standard deviations. Interpret your findings.
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