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Stocks X and Y have the following probability distributions of expected future returns PROB. X Y 0.1 -14% -27% 0.2 6% 0% 0.3 14% 20%
Stocks X and Y have the following probability distributions of expected future returns
PROB. | X | Y |
---|---|---|
0.1 | -14% | -27% |
0.2 | 6% | 0% |
0.3 | 14% | 20% |
0.2 | 21% | 27% |
0.2 | 37% | 47% |
a. Calculate the expected rate of return, rY, for Stock Y (rX = 15.60%.)
b. Calculate the standard deviation of expected returns, X, for Stock X (Y = 21.28%.)
c. Now calculate the coefficient of variation for Stock Y
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