Suppose that your estimates of the possible one-year returns from investing in the common stock of the AYZ Corporation were as follows: Probability of occurrence 0.2 0.1 0.3 0.2 0.2 Possible return -10% 5% 20% 35% 50% What are the expected return? Calculate the standard deviation?
Suppose that your estimates of the possible one-year returns from investing in the common stock of the AYZ Corporation were as follows: Probability of occurrence 0.2 0.1 0.3 0.2 0.2 Possible return -10% 5% 20% 35% 50% What are the expected return? Calculate the standard deviation?
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
[FINANCE220]
- Suppose that your estimates of the possible one-year
returns from investing in the common stock of the AYZ Corporation were as follows:
|
Probability of occurrence |
0.2 |
0.1 |
0.3 |
0.2 |
0.2 |
|
Possible return |
-10% |
5% |
20% |
35% |
50% |
- What are the expected return?
- Calculate the standard deviation?
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