Question
The market and Stock J have the following probability distributions: Probability r M r J 0.3 15.00 % 20.00 % 0.4 9.00 4.00 0.3 19.00
The market and Stock J have the following probability distributions:
| Probability | rM | rJ | ||
| 0.3 | 15.00 | % | 20.00 | % |
| 0.4 | 9.00 | 4.00 | ||
| 0.3 | 19.00 | 10.00 | ||
The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.
| Expected Returns: Discrete Distribution | |||||
| Probability Distributions: | |||||
| Probability | rM | rJ | |||
| 0.3 | 15.00% | 20.00% | |||
| 0.4 | 9.00% | 4.00% | |||
| 0.3 | 19.00% | 10.00% | |||
| rM | rJ | Formulas | |||
| Expected return | #N/A | #N/A | |||
| Standard deviation | #N/A | #N/A | |||
Calculate the expected rate of return for the market. Do not round intermediate calculations. Round your answer to two decimal places. fill in the blank 2 % Calculate the expected rate of return for Stock J. Do not round intermediate calculations. Round your answer to two decimal places. fill in the blank 3 %
Calculate the standard deviation for the market. Do not round intermediate calculations. Round your answer to two decimal places. fill in the blank 4 % Calculate the standard deviation for Stock J. Do not round intermediate calculations. Round your answer to two decimal places. fill in the blank 5 %
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Investing From Scratch A Handbook For The Young Investor
Authors: James Lowell
1st Edition
014303684X, 978-0143036845
