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Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (7%) (20%) 0.2 5 0 0.4 15 21
Stocks A and B have the following probability distributions of expected future returns:
Probability A B
0.1 (7%) (20%)
0.2 5 0
0.4 15 21
0.2 20 26
0.1 28 44
1)Calculate the expected rate of return,r b, for Stock B ( r a= 13.10%.) Do not round intermediate calculations. Round your answer to two decimal places.
_____%
2)Calculate the standard deviation of expected returns, A, for Stock A (B = 17.01%.) Do not round intermediate calculations. Round your answer to two decimal places.
_____ %
3)Now calculate the coefficient of variation for Stock B. Do not round intermediate calculations. Round your answer to two decimal places.
______
4)Assume the risk-free rate is 2.5%. What are the Sharpe ratios for Stocks A and B? Do not round intermediate calculations. Round your answers to four decimal places.
Stock A: ____
Stock B: ____
please answer all parts thankyou !
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