A stock's returns have the following distribution: Demand for the Probability of This Rate of Return If Company's Products Demand Occurring This Demand Occurs Weak 0.1 (26%) Below average 0.1 (11) Average 0.4 18 Above average 0.3 27 Strong 0.1 52 1.0 Assume the risk-free rate is 2%. Calculate the stock's expected return, standard deviation, coefficient of variation, and Sharpe ratio. onloulntionc R ound vour ans wers to two decimal places
A stock's returns have the following distribution: Demand for the Probability of This Rate of Return If Company's Products Demand Occurring This Demand Occurs Weak 0.1 (26%) Below average 0.1 (11) Average 0.4 18 Above average 0.3 27 Strong 0.1 52 1.0 Assume the risk-free rate is 2%. Calculate the stock's expected return, standard deviation, coefficient of variation, and Sharpe ratio. onloulntionc R ound vour ans wers to two decimal places
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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answer each part CORRECTLY please!
![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 | -26 |
| Below average | 0.1 | -11 |
| Average | 0.4 | 18 |
| Above average | 0.3 | 27 |
| Strong | 0.1 | 52 |
| **Total** | **1.0** | |
Assume the risk-free rate is 2%. 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: _______](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F552bce27-2e42-4405-9478-45c26e7ea34f%2F3401f570-ae6b-4a9b-a7e3-5b2d76eb2f4e%2Fgsbnv2g_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 | -26 |
| Below average | 0.1 | -11 |
| Average | 0.4 | 18 |
| Above average | 0.3 | 27 |
| Strong | 0.1 | 52 |
| **Total** | **1.0** | |
Assume the risk-free rate is 2%. 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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