(6-5) Expected Return: Discrete Distribution A stock's return has the following distribution: Demand for the Company's Products Weak Below average Average Above average Strong Probability of This Demand Occurring 0.1 0.2 0.4 0.2 0.1 1.0 Calculate the stock's expected return and standard deviation. Rate of Return if This Demand Occurs (%) -50% -5 16 25 60
(6-5) Expected Return: Discrete Distribution A stock's return has the following distribution: Demand for the Company's Products Weak Below average Average Above average Strong Probability of This Demand Occurring 0.1 0.2 0.4 0.2 0.1 1.0 Calculate the stock's expected return and standard deviation. Rate of Return if This Demand Occurs (%) -50% -5 16 25 60
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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
Transcribed Image Text:(6-5) Expected Return: Discrete Distribution
A stock's return has the following distribution:
Demand for the
Company's Products
Weak
Below average
Average
Above average
Strong
Probability of This
Demand Occurring
0.1
0.2
0.4
0.2
0.1
1.0
Calculate the stock's expected return and standard deviation.
Rate of Return if This
Demand Occurs (%)
-50%
-5
16
25
60
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