|A stock's expected return has the following distribution: Demand for the product Probability Rate of return Weak 0.1 50% Below average 0.2 5% Average 0.4 16% Above average 0.2 25% Strong 0.1 60% Calculate the stocks expected return, standard deviation and CV.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A stock's expected return has the following distribution:
Demand for the product
Probability
Rate of return
Weak
0.1
50%
Below average
0.2
5%
Average
0.4
16%
Above average
0.2
25%
Strong
0.1
60%
Calculate the stocks expected return, standard deviation and CV.
Transcribed Image Text:A stock's expected return has the following distribution: Demand for the product Probability Rate of return Weak 0.1 50% Below average 0.2 5% Average 0.4 16% Above average 0.2 25% Strong 0.1 60% Calculate the stocks expected return, standard deviation and CV.
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