Ripken Iron Works believes the following probability distribution exists for its stock. What is the coefficient of variation on the company's stock?State of the EconomyProbability of State OccurringStock's Expected ReturnBoom0.2525%Normal0.5015%Recession0.25

Ripken Iron Works believes the following probability distribution exists for its stock. What is the coefficient of variation on the company's stock?State of the EconomyProbability of State OccurringStock's Expected ReturnBoom0.2525%Normal0.5015%Recession0.25

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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Question

Ripken Iron Works believes the following probability distribution exists for its stock. What is the coefficient of variation on the company's stock?
State of the Economy
Probability of State Occurring
Stock's Expected Return
Boom
0.25
25%
Normal
0.50
15%
Recession
0.25

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