Question
The market and Stock J have the following probability distributions: Probability r M r J 0.3 12.00 % 19.00 % 0.4 8.00 5.00 0.3 18.00
The market and Stock J have the following probability distributions:
| Probability | rM | rJ | ||
| 0.3 | 12.00 | % | 19.00 | % |
| 0.4 | 8.00 | 5.00 | ||
| 0.3 | 18.00 | 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 | 12.00% | 19.00% | |||||
| 0.4 | 8.00% | 5.00% | |||||
| 0.3 | 18.00% | 10.00% | |||||
| rM | rJ | Formulas | |||||
| Expected return | #N/A | #N/A | |||||
| Standard deviation | #N/A | #N/A | |||||
a. Calculate the expected rate of return for the market. Do not round intermediate calculations. Round your answer to two decimal places. Calculate the expected rate of return for Stock J. Do not round intermediate calculations. Round your answer to two decimal places.
b. Calculate the standard deviation for the market. Do not round intermediate calculations. Round your answer to two decimal places.
Calculate the standard deviation for Stock J. Do not round intermediate calculations. 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
Gapenskis Understanding Healthcare Financial Management
Authors: George H. Pink, Paula H. Song
8th Edition
1640551093, 978-1640551091
