Question
The following data represent the probability distribution of the holding period returns for an investment in Lazy Rapids Kayaks (LARK) stock. State of the Economy
The following data represent the probability distribution of the holding period returns for an investment in Lazy Rapids Kayaks (LARK) stock.
| State of the Economy | Scenario #(s) | Probability, p(s) | HPR |
| Boom | 1 | 0.328 | 30.00% |
| Normal growth | 2 | 0.402 | 9.40% |
| Recession | 3 | 0.27 | -18.30% |
a. What is the expected return on LARK? (Round your answer to 2 decimal places.)
Expected return %
b. What is the standard deviation of the returns on LARK? (Round your answer to 2 decimal places.)
Standard deviation %
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Fundamentals of Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
11th edition
77861701, 978-0077861704
