Question
Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (6%) (38%) 0.2 2 0 0.3 16 22
Stocks A and B have the following probability distributions of expected future returns:
Probability A B
0.1 (6%) (38%)
0.2 2 0
0.3 16 22
0.3 24 30
0.1 34 46
Calculate the expected rate of return, rB, for Stock B (rA = 15.20%.) Do not round intermediate calculations. Round your answer to two decimal places. % Calculate the standard deviation of expected returns, A, for Stock A (B = 22.41%.) Do not round intermediate calculations. Round your answer to two decimal places. % Now calculate the coefficient of variation for Stock B. Round your answer to two decimal places.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started