Stand-alone risk is the risk an investor would face if he or she held only . No investment should be undertaken unless its expected rate of return is high enough to compensate for its perceived The expected rate of return is the return expected to be realized from an investment; it is calculated as the of the probability distribution of possible results as shown below: Expectedrateofreturn=r^=P1r1+P2r2++PNrN=i=1NPiri The the variability of a set of observations as shown below: Standarddeviation==i=1N(rir^)2Pi If you have a sample of actual historical data, then the standard deviation calculation would be changed as follows: Estimated=N1t=1N(rtrAvg)2 The coefficient of variation is a better measure of stand-alone risk than standard deviation because it is a standardized measure of risk per unit; it is calculated as the divided by the expected return. The coefficient of variation shows the risk per unit of return, so it provides a more meaningful risk measure when the expected returns on two alternatives are not The Sharpe ratio compares the asset's realized excess return to its over a specified period. Excess returns measure the amount that investment returns are above the risk-free rate - so investments with returns equal to the risk-free rate will have a Sharpe ratio. It follows that over a given time period, investments with Sharpe ratios performed better, because they generated higher excess returns per unit of risk. The Sharpe ratio is calculated as: Sharpe ratio =( Return - Risk-free rate )/ Quantitative Problem: You are given the following probability distribution for CHC Enterprises: What is the stock's expected return? Do not round intermediate calculations. Round your answer to two decimal places. % What is the stock's standard deviation? Do not round intermediate calculations. Round your answer to two decimal places. % What is the stock's coefficient of variation? Do not round intermediate calculations. Round your answer to two decimal places