Question

You were analyzing a stock and came up with the following
probability distribution of the stock returns. What is the
coefficient of variation on the company's stock?

Round your answer to two decimal places. For example, if your
answer is $345.6671 round as 345.67 and if your answer is .05718 or
5.7182% round as 5.72.

State of the Economy |
Probability of State Occurring |
Stock's Expected Return |

Boom |
25.00% |
19.90% |

Normal |
51.00% |
17.45% |

Recession |
24.00% |
8.10% |

Answer #1

Expected Return=Respective return*Respective probability

=(0.25*19.9)+(0.51*17.45)+(0.24*8.1)=15.8185%

probability | Return | probability*(Return-Expected Return)^2 |

0.25 | 19.9 | 0.25*(19.9-15.8185)^2=4.164660563 |

0.51 | 17.45 | 0.51*(17.45-15.8185)^2=1.357514048 |

0.24 | 8.1 | 0.24*(8.1-15.8185)^2=14.29805814 |

Total=19.82023275% |

Standard deviation=[Total probability*(Return-Expected Return)^2/Total probability]^(1/2)

=4.452%(Approx)

**Coefficient of variation=**Standard
deviation/Expected Return

=(4.452/15.8185)=**0.28(Approx).**

You were analyzing a stock and came up with the following
probability distribution of the stock returns. What is the
coefficient of variation on the company's stock? Round your answer
to two decimal places.
State of the Economy
Probability of State Occurring
Stock's Expected Return
Boom
30.00%
19.55%
Normal
51.00%
16.35%
Recession
19.00%
9.50%

Expected Return, Variance, Std. Deviation and Cofficient of
Variation:
Magee Inc.'s manager believes that economic conditions during the
next year will be strong, normal, or weak, and she thinks that the
firm's returns will have the probability distribution shown below.
What's the standard deviation of the estimated returns?
Round your answer to two decimal places. For example, if your
answer is $345.6671 round as 345.67 and if your answer is .05718 or
5.7182% round as 5.72.
State of the Economy...

Expected Return, Variance, Std. Deviation and Cofficient of
Variation:
Magee Inc.'s manager believes that economic conditions during the
next year will be strong, normal, or weak, and she thinks that the
firm's returns will have the probability distribution shown below.
What's the standard deviation of the estimated returns?
Round your answer to two decimal places. For example, if your
answer is $345.6671 round as 345.67 and if your answer is .05718 or
5.7182% round as 5.72.
State of the Economy...

Rocket Medical Corp. believes the following probability
distribution exists for its stock. What is the coefficient of
variation on the company's stock? Do not round your intermediate
calculations. State of the Economy Probability of State Occurring
Stock's Expected Return Boom 0.25 28% Normal 0.55 15% Recession
0.20 -2%

Mr. Jones has a 2-stock portfolio with a total value of
$550,000. $205,000 is invested in Stock A and the remainder is
invested in Stock B. If standard deviation of Stock A is 19.45%,
Stock B is 10.60%, and correlation between Stock A and Stock B is
–0.10, what would be the expected risk on Mr. Jones’ portfolio
(standard deviation of the portfolio return)? Calculate with at
least 4 decimal places and round your answer to two decimal places.
For...

2. Quantitative Problem: You are given the
following probability distribution for CHC Enterprises:
State of Economy
Probability
Rate of return
Strong
0.25
22%
Normal
0.5
9%
Weak
0.25
-6%
- What is the stock's standard deviation? Round your answer to
two decimal places. Do not round intermediate calculations.
_____%
- What is the stock's coefficient of variation? Round your
answer to two decimal places. Do not round intermediate
calculations.
______
5.
A stock's returns have the following distribution:
Demand for...

A stock's returns have the following distribution: Demand for
the Company's Products Probability of This Demand Occurring Rate of
Return If This Demand Occurs Weak 0.1 -22% Below average 0.3 -14
Average 0.3 13 Above average 0.2 34 Strong 0.1 62 1.0 Calculate the
stock's expected return. Round your answer to two decimal places. %
Calculate the stock's standard deviation. Round your answer to two
decimal places. % Calculate the stock's coefficient of variation.
Round your answer to two decimal...

A stock's returns have the following distribution:
Demand for the
Company's Products
Probability of This
Demand Occurring
Rate of Return If
This Demand Occurs
Weak
0.1
(48%)
Below average
0.4
(7)
Average
0.3
14
Above average
0.1
32
Strong
0.1
46
1.0
Calculate the stock's expected return. Round your answer to two
decimal places.
%
Calculate the stock's standard deviation. Do not round
intermediate calculations. Round your answer to two decimal
places.
%
Calculate the stock's coefficient of variation. Round...

A stock's returns have the following distribution:
Demand for the Company's Products Probability of This Demand
Occurring Rate of Return If This Demand Occurs
Weak 0.1
(22%)
Below average 0.1 (8)
Average 0.5 11
Above average 0.2 27
Strong 0.1 45
Calculate the stock's expected return. Round your answer to two
decimal places.
Calculate the stock's standard deviation. Do not round
intermediate calculations. Round your answer to two decimal
places.
Calculate the stock's coefficient of variation....

A stock's returns have the following distribution: Demand for
the Company's Products Probability of This Demand Occurring Rate of
Return If This Demand Occurs Weak 0.2 (32%) Below average 0.1 (9)
Average 0.3 10 Above average 0.1 27 Strong 0.3 45 1.0 Calculate the
stock's expected return. Round your answer to two decimal places. %
Calculate the stock's standard deviation. Do not round intermediate
calculations. Round your answer to two decimal places. % Calculate
the stock's coefficient of variation. Round...

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