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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 | -20 | % | ||
Below average | 0.2 | -8 | |||
Average | 0.4 | 17 | |||
Above average | 0.2 | 35 | |||
Strong | 0.1 | 65 | |||
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: %
Step by step
Solved in 3 steps with 3 images
- 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 10 Above average 0.2 40 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: %Assume the risk-free rate is 2%. 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.Expected Return: Discrete Distribution A stock's return has the following distribution: Demand for theCompany's Products Probability of ThisDemand Occurring Rate of Return if ThisDemand Occurs (%) Weak 0.1 -20% Below average 0.2 -8 Average 0.4 6 Above average 0.2 30 Strong 0.1 65 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. %
- A stock's returns have the following distribution: Standard deviation: Coefficient of variation: Sharpe ratio: % Demand for the Company's Products Weak Below average % Average Above average Strong Probability of this Demand Occurring 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: 0.1 0.1 0.4 0.3 0.1 1.0 Rate of Return if this Demand Occurs (38%) (11) 15 23 56Assume the risk-free rate is 2%. 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 ng distribution: Demand for theCompany's Products Probability of thisDemand Occurring Rate of Return ifthis Demand Occurs Weak 0.1 (20%) Below average 0.1 (13) Average 0.3 18 Above average 0.3 40 Strong 0.2 64 1.0A stock's returns have the following distribution: % Demand for the Company's Products Weak Below average Average Above average Strong % Probability of this Demand Occurring 0.1 0.1 0.3 0.3 Rate of Return if this Demand Occurs 0.2 1.0 Assume the risk-free rate is 2%. 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 variation: Sharpe ratio: (20%) (14) 10 36 52
- Given the returns and probabilities for the three possible states listed below, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 8.10 percent and 11.60 percent, respectively. (Round answer to 4 decimal places, e.g. 0.0768.) Good OK Poor Covariance Probability 0.22 0.60 0.18 Return on Stock A 0.30 0.10 -0.25 Return on Stock B 0.50 0.10 -0.30Expected Return: Discrete Distribution A stock's return has the following distribution: Demand for theCompany's Products Probability of ThisDemand Occurring Rate of Return if ThisDemand Occurs (%) Weak 0.1 -45 % Below average 0.2 -8 Average 0.4 16 Above average 0.2 35 Strong 0.1 60 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 Returns: Discrete Distribution The market and Stock ) have the following probability distributions: Probability 0.3 14% 19% 0.4 10 0.3 17 11 a. Calculate the expected rate of returm for the market. Round your answer to two decimal places. Calculate the expected rate of retum for Stock ), Round your answer to two decimal places. b. Calculate the standard deviation for the market. Do not round intermediate calculations. Round your answer to two decimal places. Calculate the standard deviation for Stock J. Do not round intermediate calculations Round your answer to two decimal places.
- The market and Stock J have the following probability distributions: Probability rM rJ 0.3 14 % 18 % 0.4 10 4 0.3 18 13 Calculate the expected rates of return for the market and Stock J. Round your answers to one decimal place. Expected rate of return (Market): % Expected rate of return (Stock J): % Calculate the standard deviations for the market and Stock J. Do not round intermediate calculations. Round your answers to two decimal places. Standard deviation (Market): % Standard deviation (Stock J): %A stock's returns have the following distribution: Demand for the Company's Products Weak Below average Average Above average Strong % Probability of this Demand Occurring 0.1 0.1 0.3 0.3 0.2 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 variation: Sharpe ratio: % Rate of Return if this Demand Occurs h (42%) (13) 12 27 59A stock's returns have the following distribution: Demand for theCompany's Products Probability of thisDemand Occurring Rate of Return ifthis Demand Occurs Weak 0.1 (22%) Below average 0.2 (13) Average 0.3 17 Above average 0.3 39 Strong 0.1 64 1.0 Assume the risk-free rate is 2%. 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 variation: Sharpe ratio: