A stock's returns have the following distribution: Demand for the company's probability of this demand product occurring weak 10% below average 10% 30% 30% 20% average above average strong Rate of return if this demand occurs -30% -14% 11% 20% 45% Assume the risk-free rate is 2.8%. Calculate the stock's expected return, standard deviation, coefficient of variation, and Sharpe ratio. exp return =13.90%, std dev=21.86%, CV=1.57, and sharpe ratio =0.54 exp return = 13.90%, std dev= 21.86%, CV=0.57, and sharpe ratio =0.54 exp return = 13.90%, std dev=21.86%, CV=1.57, and sharpe ratio =0.51 exp return = 3.90%, std dev=11.86%, CV=2.57, and sharpe ratio =0.59
A stock's returns have the following distribution: Demand for the company's probability of this demand product occurring weak 10% below average 10% 30% 30% 20% average above average strong Rate of return if this demand occurs -30% -14% 11% 20% 45% Assume the risk-free rate is 2.8%. Calculate the stock's expected return, standard deviation, coefficient of variation, and Sharpe ratio. exp return =13.90%, std dev=21.86%, CV=1.57, and sharpe ratio =0.54 exp return = 13.90%, std dev= 21.86%, CV=0.57, and sharpe ratio =0.54 exp return = 13.90%, std dev=21.86%, CV=1.57, and sharpe ratio =0.51 exp return = 3.90%, std dev=11.86%, CV=2.57, and sharpe ratio =0.59
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
Problem 1PS
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Transcribed Image Text:A stock's returns have the following distribution:
Demand for the company's probability of this demand
product
occurring
weak
below average
average
above average
strong
10%
10%
30%
30%
20%
Rate of return if this
demand occurs
-30%
-14%
11%
20%
45%
Assume the risk-free rate is 2.8%. Calculate the stock's expected return, standard
deviation, coefficient of variation, and Sharpe ratio.
exp return =13.90%, std dev=21.86%, CV=1.57, and sharpe ratio =0.54
exp return = 13.90%, std dev=21.86%, CV=0.57, and sharpe ratio =0.54
exp return = 13.90%, std dev=21.86%, CV=1.57, and sharpe ratio =0.51
exp return =3.90%, std dev=11.86%, CV=2.57, and sharpe ratio =0.59
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