5. Given the following expectations for the next year, what is the expected return, standard deviation, and beta of Stock A? Use the excel sheet we covered to find the answer. Returns Probability Stock A Market 0.10 0.05 0.02 0.25 0.09 0.08 0.30 0.13 0.12 0.25 0.19 0.15 0.10 0.21 0.16
5. Given the following expectations for the next year, what is the expected return, standard deviation, and beta of Stock A? Use the excel sheet we covered to find the answer. Returns Probability Stock A Market 0.10 0.05 0.02 0.25 0.09 0.08 0.30 0.13 0.12 0.25 0.19 0.15 0.10 0.21 0.16
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 1P
Related questions
Concept explainers
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Question
![5. Given the following expectations for the next year, what is the expected return, standard deviation,
and beta of Stock A? Use the excel sheet we covered to find the answer.
Returns
Probability
Stock A
Market
0.10
0.05
0.02
0.25
0.09
0.08
0.30
0.13
0.12
0.25
0.19
0.15
0.10
0.21
0.16](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd8a376fa-df43-4453-9fe7-5f9fe9161e76%2F5cb3f6c3-de79-41b6-90e5-e67757899b03%2Fsf9xbbi.png&w=3840&q=75)
Transcribed Image Text:5. Given the following expectations for the next year, what is the expected return, standard deviation,
and beta of Stock A? Use the excel sheet we covered to find the answer.
Returns
Probability
Stock A
Market
0.10
0.05
0.02
0.25
0.09
0.08
0.30
0.13
0.12
0.25
0.19
0.15
0.10
0.21
0.16
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