Expected Return: Discrete DistributionA stock's return has the following distribution:Demand for theCompany's ProductsProbability of ThisDemand OccurringRate of Return if ThisDemand Occurs (%)Weak 0.1 -20%Below average 0.2 -8Average 0.4 6Above average 0.2 30Strong 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. %

Answered: A stock's return has the following…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter3: Risk And Return: Part Ii

Section: Chapter Questions

Problem 3P: Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B...

See similar textbooks

Related questions

Question

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	-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.
%

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions