Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (14%) (32%) 0.3 6 0 0.3 12 18
Stocks A and B have the following probability distributions of expected future returns:
Probability | A | B |
0.1 | (14%) | (32%) |
0.3 | 6 | 0 |
0.3 | 12 | 18 |
0.2 | 19 | 29 |
0.1 | 40 | 39 |
A. Calculate the expected rate of return, rB, for Stock B (rA = 11.80%.) Do not round intermediate calculations. Round your answer to two decimal places. ___ %
B. Calculate the standard deviation of expected returns, ?A, for Stock A (?B = 19.45%.) Do not round intermediate calculations. Round your answer to two decimal places. ___ %
C. 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