Question

) You have estimated the following probability distributions of expected future returns for Stocks X and...

) You have estimated the following probability distributions of expected future returns for Stocks X and Y:

Stock X

Probability

Return

0.5

-10

0.4

10

0.1

40

2a- What is the expected rate of return for Stock X?

2b- What is the standard deviation of expected returns for Stock X

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Answer #1

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2a : 3.00%

2b : 15.52%

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