Question

# EXPECTED RETURN A stock's returns have the following distribution: Demand for the Company's Products Probability of...

EXPECTED RETURN

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 (24%) Below average 0.3 (10) Average 0.3 14 Above average 0.1 32 Strong 0.2 66 1.0
1. Calculate the stock's expected return. Round your answer to two decimal places.
%

2. Calculate the stock's standard deviation. Do not round intermediate calculations. Round your answer to two decimal places.
%

3. Calculate the stock's coefficient of variation. Round your answer to two decimal places.

 Stock Scenario Probability Return '=rate of return * probability Actual return -expected return(A) (A)^2* probability Weak 0.1 -24.00% -2.40% -39.20% 0.015366 Below average 0.3 -10.00% -3.00% -25.20% 0.019051 Average 0.3 14.00% 4.20% -1.20% 0.000043 Above average 0.1 32% 3.20% 16.80% 0.002822 Strong 0.2 66% 13.20% 50.80% 0.051613 Expected return = sum of weighted return = 15.20% Sum= 0.088896 Standard deviation of Stock '=(sum)^(1/2) 29.82% Coefficient of variation= STD DEV/RETURN= 1.961542

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