Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions