Question
Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.2 (6%) (29%) 0.2 5 0 0.3 16 21
Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.2 (6%) (29%) 0.2 5 0 0.3 16 21 0.2 19 27 0.1 32 48
a.Calculate the expected rate of return, rB, for Stock B (rA = 11.60%.) 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 = 23.71%.) 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.
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