Note: question doesn't specify, what needs to be calculated. Therefore, Maximum Possible calculations are given. In case, any further answer is needed, please comment.
Economy | Probabilty | Return |
Probability* Return |
Return- Expected Return[D] |
Probability*D*D |
Boom | 0.63 | 0.214 | 0.13482 | 0.12987 | 0.010625717 |
Recession | 0.37 | -0.137 | -0.05069 | -0.22113 | 0.018092436 |
Expected Return = Sum of Probabilty*Return |
0.08413 = 8.413% |
Variance =Sum of [D^2] |
0.028718153 = 2.8718% | ||
Standard Deviation =Variance^1/2 |
0.169464312 = 16.9464% | ||||
Co
Efficient of Variation = Standard Deviation/Mean i.e. Expected Return |
0.1694643124/0.08413 | 2.014314896 |
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