A stock's returns have the following distribution: Demand for theCompany's Products Probability of thisDemand Occurring Rate of Return ifthis Demand Occurs Weak 0.1 (28%) Below average 0.1 (10)    Average 0.4 12    Above average 0.3 22    Strong 0.1 55      1.0   Assume the risk-free rate is 3%. Calculate the stock's expected return, standard deviation, coefficient of variation, and Sharpe ratio. Do not round intermediate calculations. Round your answers to two decimal places. Stock's expected return:   % Standard deviation:   % Coefficient of variation:  Sharpe ratio:

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
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A stock's returns have the following distribution:

Demand for the
Company's Products
Probability of this
Demand Occurring
Rate of Return if
this Demand Occurs
Weak 0.1 (28%)
Below average 0.1 (10)   
Average 0.4 12   
Above average 0.3 22   
Strong 0.1 55   
  1.0  

Assume the risk-free rate is 3%. Calculate the stock's expected return, standard deviation, coefficient of variation, and Sharpe ratio. Do not round intermediate calculations. Round your answers to two decimal places.

Stock's expected return:   %

Standard deviation:   %

Coefficient of variation: 

Sharpe ratio: 

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