Question
Suppose we have the following discrete probability distribution of returns on three different assets: government bonds, ordinary shares of company A, and ordinary shares of
Suppose we have the following discrete probability distribution of returns on three different assets: government bonds, ordinary shares of company A, and ordinary shares of company B.
|
| % Returns for a period (e.g year) | ||
Economic Condition | Probability | Bonds | Company A shares | Company B shares |
Very poor Poor Average Good | 0.1 0.2 0.4 0.3 1.0 | 9 8 6 4 | -2 3 8 11 | -3 2 9 13 |
1) Calculate the expected returns for these assets. (6.1%, 6.9%, 7.6%)
2) Calculate the standard deviations for these assets. (Approximately 1.7%, 4.06%, 5.2%)
3) Calculate the coefficients of variation for these asset. (0.279, 0.588, 0.684)
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