Two sets of security X and Y have the following characteristics. Security X Probability Return Securty Y Probability Return 0.1 30% 0.5 -20% 0.2 20% 0.25 10% 0.4 10% 0.30 20% 0.2 05% 0.30 30% 0.1 -10% 0.10 40% Required. Calculate the expected return for each Security. Calculate the standard deviation for each security.

Two sets of security X and Y have the following characteristics. Security X Probability Return Securty Y Probability Return 0.1 30% 0.5 -20% 0.2 20% 0.25 10% 0.4 10% 0.30 20% 0.2 05% 0.30 30% 0.1 -10% 0.10 40% Required. Calculate the expected return for each Security. Calculate the standard deviation for each security.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 2QTD

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Question

Two sets of security X and Y have the following characteristics.

Security X Probability	Return	Securty Y Probability	Return
0.1	30%	0.5	-20%
0.2	20%	0.25	10%
0.4	10%	0.30	20%
0.2	05%	0.30	30%
0.1	-10%	0.10	40%

Required.

Calculate the expected return for each Security.
Calculate the standard deviation for each security.

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