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1. The distribution of rates of return on XYZ stock is as follows State of Probability of State Occurring XYZ Stock Economy Return (%) Depression 0. 10 -4.5% Recession 0.20 4.4% Normal 0.50 12.0% Boom 0.20 20.7% а. What is the expected return for the stock? b. What is the standard deviation of returns for the stock?

1. The distribution of rates of return on XYZ stock is as follows State of Probability of State Occurring XYZ Stock Economy Return (%) Depression 0. 10 -4.5% Recession 0.20 4.4% Normal 0.50 12.0% Boom 0.20 20.7% а. What is the expected return for the stock? b. What is the standard deviation of returns for the stock?

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter5: Financial Options
Section: Chapter Questions
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1. The distribution of rates of return on XYZ stock is as follows Probability of State Occurring State of XYZ Stock Economy Return (%) Depression 0. 10 -4.5% Recession 0.20 4.4% Normal 0.50 12.0% Вoom 0.20 20.7% а. What is the expected return for the stock? b. What is the standard deviation of returns for the stock?
Transcribed Image Text:1. The distribution of rates of return on XYZ stock is as follows Probability of State Occurring State of XYZ Stock Economy Return (%) Depression 0. 10 -4.5% Recession 0.20 4.4% Normal 0.50 12.0% Вoom 0.20 20.7% а. What is the expected return for the stock? b. What is the standard deviation of returns for the stock?
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