Question
In: Finance
a. Expected Return: Discrete Distribution A stock's return has the following distribution: Demand for the Company's...
a. 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 | -8 | ||
| Average | 0.4 | 13 | ||
| Above average | 0.2 | 40 | ||
| Strong | 0.1 | 65 | ||
| 1.0 | ||||
Calculate the standard deviation. Round your answer to nearest two decimal places.
b. The market and Stock J have the following probability distributions:
| Probability | rM | rJ |
| 0.3 | 16% | 19% |
| 0.4 | 8 | 5 |
| 0.3 | 18 | 10 |
Calculate the standard deviation for the market and Stock J. Round your answer to nearest two decimal places.
Solutions
b)
jeff jeffy answered 1 week agoRelated Solutions
Expected Return: Discrete Distribution A stock's return has the following distribution: Demand for the Company's Products...
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
-25%
Below average
0.2
-8
Average
0.4
6
Above average
0.2
30
Strong
0.1
60
1.0
Calculate the stock's expected return. Round your answer to two
decimal places.
10.3 %
Calculate the standard deviation. Round your answer to two
decimal places.
???? %
I was able to answer the...
Expected Return: Discrete Distribution A stock's return has the following distribution: Demand for the Company's Products...
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
-35
%
Below average
0.2
-8
Average
0.4
10
Above average
0.2
35
Strong
0.1
50
1.0
Calculate the stock's expected return. Round your answer to two
decimal places.
%
Calculate the standard deviation. Do not round intermediate
calculations. Round your answer to two decimal places.
%
Expected Return: Discrete Distribution A stock's return has the following distribution: Demand for the Company's Products...
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
-25%
Below average
0.2
-9
Average
0.4
12
Above average
0.2
40
Strong
0.1
55
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.
%
Expected Return: Discrete Distribution A stock's return has the following distribution: Demand for the Company's Products...
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
-35
%
Below average
0.2
-5
Average
0.4
18
Above average
0.2
30
Strong
0.1
70
1.0
Calculate the stock’s expected return and standard deviation. Do
not round intermediate calculations. Round your answers to two
decimal places.
Expected return: %
Standard deviation: %
Expected return A stock's returns have the following distribution: Demand for the Company's Products Probability of...
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
-5
Average
0.5
10
Above average
0.1
25
Strong
0.1
53
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...
EXPECTED RETURN A stock's returns have the following distribution: Demand for the Company's Products Probability of...
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
0.2
(12)
Average
0.3
12
Above average
0.1
25
Strong
0.3
72
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...
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
(26%)
Below average
0.2
(14)
Average
0.3
10
Above average
0.3
21
Strong
0.1
73
1.0
Assume the risk-free rate is 4%. 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...
A stock's returns have the following distribution: Demand for the Company's Products Probability of This Demand...
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
(48%)
Below average
0.1
(15)
Average
0.3
11
Above average
0.3
40
Strong
0.2
65
1.0
Assume the risk-free rate is 4%. 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...
A stock's returns have the following distribution: Demand for the Company's Products Probability of This Demand...
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
-46%
Below average
0.1
-13
Average
0.4
14
Above average
0.3
34
Strong
0.1
56
=
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...
A stock's returns have the following distribution: Demand for the Company's Products Probability of This Demand...
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
(28%)
Below average
0.1
(11)
Average
0.4
10
Above average
0.3
35
Strong
0.1
61
1.0
Assume the risk-free rate is 4%. 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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