Expected return A stock\'s returns have the following distribution: Demand for t

Question

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 -38%
Below average 0.4 -11
Average 0.3 13
Above average 0.1 37
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. Round your answer to two decimal places.
%
Calculate the stock's coefficient of variation. Round your answer to two decimal places.

Explanation / Answer

stock's expected return= (.1x-38)+(.4x-11)+(.3x13)+(.1x37)+(.1x71)= 6.5% stock's standard deviation= 29.022 coefficient of variation= 29.022/6.5x100= 4.465%

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