Question
Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.2 -15% -27% 0.2 2 0 0.3 11 20
Stocks A and B have the following probability distributions of expected future returns:
Probability | A | B |
0.2 | -15% | -27% |
0.2 | 2 | 0 |
0.3 | 11 | 20 |
0.2 | 21 | 26 |
0.1 | 30 | 39 |
Calculate the expected rate of return, rB, for Stock B (rA = 7.90%.) Do not round intermediate calculations. Round your answer to two decimal places. %
Calculate the standard deviation of expected returns, A, for Stock A (B = 21.42%.) Do not round intermediate calculations. Round your answer to two decimal places. %
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