You are given the following probability distribution for CHC Enterprises: What i

Q: You are given the following probability distribution for CHC Enterprises: What i

Part A: Expected Return = 0.2 * 21% + 0.45 * 9% - 0.35 * 5% Expected Return = 4.2% + 4.05% - 1.75% Expected Return = 6.50% Part B: Standard Deviation2 = 0.2 * (21% - 6.5%)2 + 0.45 * (9% - 6.5%)2 + 0.35 * (-5% - 6.5%)2 Standard Deviation = 9.55% Part C: Coefficient of Variation = Standard Deviation/ Mean Coefficient of Variation = 9.55%/ 6.50% Coefficient of Variation = 1.47

ID: 2783668 • Letter: Y

Question

You are given the following probability distribution for CHC Enterprises:

What is the stock's expected return? Round your answer to 2 decimal places. Do not round intermediate calculations.
%

What is the stock's standard deviation? Round your answer to two decimal places. Do not round intermediate calculations.
%

What is the stock's coefficient of variation? Round your answer to two decimal places. Do not round intermediate calculations.

State of Economy Probability Rate of return Strong 0.2 21% Normal 0.45 9% Weak 0.35 -5%

Explanation / Answer

Part A:

Expected Return = 0.2 * 21% + 0.45 * 9% - 0.35 * 5%

Expected Return = 4.2% + 4.05% - 1.75%

Expected Return = 6.50%

Part B:

Standard Deviation2 = 0.2 * (21% - 6.5%)2 + 0.45 * (9% - 6.5%)2 + 0.35 * (-5% - 6.5%)2

Standard Deviation = 9.55%

Part C:

Coefficient of Variation = Standard Deviation/ Mean

Coefficient of Variation = 9.55%/ 6.50%

Coefficient of Variation = 1.47

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You are given the following probability distribution for CHC Enterprises: What i

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You are given the following probability distribution for CHC Enterprises: What i

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