Expected Return: Discrete Distribution
A stock's return has the following distribution:
Demand for the Company's Products |
Probability of This Demand Occurring |
Rate of Return if This Demand Occurs (%) |
||
Weak | 0.1 | -40% | ||
Below average | 0.2 | -5 | ||
Average | 0.4 | 15 | ||
Above average | 0.2 | 30 | ||
Strong | 0.1 | 50 | ||
1.0 |
Calculate the stock's expected return. Round your answer to two
decimal places.
%
Calculate the standard deviation. Round your answer to two
decimal places.
%
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