The market and Stock A have the following probability distributions: Probability Return on market Return on Stock A 0.2 18% 16% 0.3 12% 14% 0.5 10% 11%   Calculate the expected rates of return for the market and Stock A. Calculate the coefficient of variation for the market and Stock A (Standard deviation for market is 3.0265% and standard deviation for Stock A is 2.0224%).

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 6P: The market and Stock J have the following probability distributions: a. Calculate the expected rates...
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The market and Stock A have the following probability distributions:

Probability Return on market Return on Stock A

0.2

18% 16%
0.3 12% 14%
0.5 10% 11%

 

  1. Calculate the expected rates of return for the market and Stock A.
  2. Calculate the coefficient of variation for the market and Stock A
    1. (Standard deviation for market is 3.0265% and standard deviation for Stock A is 2.0224%).
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