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Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.2 (10%) (21%) 0.2 3 0 0.3 13 23
Stocks A and B have the following probability distributions of expected future returns:
Probability | A | B |
0.2 | (10%) | (21%) |
0.2 | 3 | 0 |
0.3 | 13 | 23 |
0.2 | 24 | 30 |
0.1 | 28 | 38 |
a.Calculate the expected rate of return, rB, for Stock B (rA = 10.10%.) 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 = 20.37%.) 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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