Question

You are given the following probability distribution for CHC Enterprises:

State of Economy | Probability | Rate of return | |

Strong | 0.25 | 22% | |

Normal | 0.45 | 9% | |

Weak | 0.30 | -6% |

What is the stock's expected return? Do not round intermediate calculations. Round your answer to two decimal places.

%

What is the stock's standard deviation? Do not round intermediate calculations. Round your answer to two decimal places.

%

What is the stock's coefficient of variation? Do not round intermediate calculations. Round your answer to two decimal places.

Answer #1

**Expected return**=Respective return*Respective
probability

=(0.25*22)+(0.45*9)+(0.3*-6)

**=7.75%**

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

0.25 | 22 | 0.25*(22-7.75)^2=50.765625 |

0.45 | 9 | 0.45*(9-7.75)^2=0.703125 |

0.3 | -6 | 0.3*(-6-7.75)^2=56.71875 |

Total=108.1875% |

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

=(108.1875)^(1/2)

**=10.40%(Approx)**

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

=10.40/7.75

**=1.34(Approx)**

Quantitative Problem: You are given the
following probability distribution for CHC Enterprises:
State of Economy
Probability
Rate of return
Strong
0.25
19
%
Normal
0.45
9
%
Weak
0.30
-5
%
What is the stock's expected return? Do not round intermediate
calculations. Round your answer to two decimal places.
%
What is the stock's standard deviation? Do not round
intermediate calculations. Round your answer to two decimal
places.
%
What is the stock's coefficient of variation? Do not round
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Weak 0.30 -5
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State of Economy
Probability
Rate of return
Strong
0.2
22%
Normal
0.45
9
Weak
0.35
-4
What is the stock's expected return? Round your answer to 2
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Quantitative Problem: You are given the
following probability distribution for CHC Enterprises:
State of Economy
Probability
Rate of return
Strong
0.15
19
%
Normal
0.45
8
%
Weak
0.40
-6
%
What is the stock's expected return? Do not round intermediate
calculations. Round your answer to two decimal places.
%
What is the stock's standard deviation? Do not round
intermediate calculations. Round your answer to two decimal
places.
%
What is the stock's coefficient of variation? Do not round
intermediate...

Quantitative Problem: You are given the
following probability distribution for CHC Enterprises:
State of Economy
Probability
Rate of return
Strong
0.15
21
%
Normal
0.50
8
%
Weak
0.35
-5
%
What is the stock's expected return? Do not round intermediate
calculations. Round your answer to two decimal places.
%
What is the stock's standard deviation? Do not round
intermediate calculations. Round your answer to two decimal
places.
%
What is the stock's coefficient of variation? Do not round
intermediate...

Quantitative Problem: You are given the following probability
distribution for CHC Enterprises:
State of Economy Probability Rate of return
Strong 0.15 20%
Normal 0.5 9
Weak 0.35 -4
What is the stock's expected return? Round your answer to 2
decimal places. Do not round intermediate calculations. 6.10 %
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
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State of Economy Probability Rate of Return
Strong 0.2 19%
Normal 0.5 9%
Weak 0.3 -4%
What is the stock's expected return? Round your answer to 2
decimal places. Do not round intermediate calculations.
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
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Probability
Rate of return
Strong
0.25
19%
Normal
0.5
8
Weak
0.25
-4
What is the stock's expected return? Round your answer to 2
decimal places. Do not round intermediate calculations.
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What is the stock's standard deviation? Round your answer to two
decimal places. Do not round intermediate calculations.
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What is the stock's coefficient of variation? Round your answer
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State of Economy
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Rate of return
Strong
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Normal
0.50
10
Weak
0.30
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