Question
The return on a share has the following distribution: Calculate the expected return and standard deviation of the stock Demand for the company's product The
The return on a share has the following distribution:
Calculate the expected return and standard deviation of the stock
Demand for the company's product | The probability that this demand will occur | Rate of return if this demand occurs (%) | |||
Weak | 0.1 | -50% | |||
Below average | 0.2 | -5 | |||
Average | 0.4 | sixteen | |||
above average | 0.2 | 25 | |||
Strong | 0.1 | 60 | |||
1.0 | |||||
Step by Step Solution
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Step: 1
SOLUTION To calculate the expected return we need to multiply the rate of return for each demand level by its corresponding probability and then sum u...
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Data Analysis And Decision Making
Authors: Christian Albright, Wayne Winston, Christopher Zappe
4th Edition
538476125, 978-0538476126
