Question

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. Round your answer to two decimal places.

Answer #1

Expected Return = 0.10 * (-0.22) + 0.10 * (-0.08) + 0.50 * 0.11
+ 0.20 * 0.27 + 0.10 * 0.45

Expected Return = 0.124

Expected Return = 12.40%

Variance = 0.10 * (-0.22 - 0.124)^2 + 0.10 * (-0.08 - 0.124)^2 +
0.50 * (0.11 - 0.124)^2 + 0.20 * (0.27 - 0.124)^2 + 0.10 * (0.45 -
0.124)^2

Variance = 0.030984

Standard Deviation = (0.030984)^(1/2)

Standard Deviation = 0.1760

Standard Deviation = 17.60%

Coefficient of Variation = Expected Return / Standard
Deviation

Coefficient of Variation = 0.1240 / 0.1760

Coefficient of Variation = 0.70

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...

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
0.2
(34%)
Below average
0.1
(15)
Average
0.4
13
Above average
0.1
33
Strong
0.2
49
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
0.2
(40%)
Below average
0.1
(11)
Average
0.4
11
Above average
0.2
38
Strong
0.1
70
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
0.2
-42%
Below Average
0.2
-9
Average
0.4
18
Above Average
0.1
23
Strong
0.1
71
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 your
answer to two decimal places.

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
0.2
(44%)
Below average
0.1
(6)
Average
0.5
17
Above average
0.1
21
Strong
0.1
64
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...

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
(48%)
Below average
0.2
(8)
Average
0.3
17
Above average
0.2
28
Strong
0.1
71
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
0.2
(38%)
Below average
0.1
(14)
Average
0.3
14
Above average
0.2
38
Strong
0.2
70
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
(44%)
Below average
0.2
(8)
Average
0.3
11
Above average
0.3
40
Strong
0.1
74
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
0.2
(36%)
Below average
0.1
(7)
Average
0.3
18
Above average
0.2
27
Strong
0.2
48
1.0
Assume the risk-free rate is 3%. Calculate the stock's expected
return, standard deviation, coefficient of variation, and Sharpe
ratio. Do not round intermediate calculations. Round your answers
to two decimal places.
Stock's expected return: %
Standard deviation: %
Coefficient of...

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