The market and Stock J have the following probability distributions: Economy Forecast Probability r. Bust 0.20 -2% 2% Below average 0.30 3% 5% Average 0.25 8% 11% Above average 0.15 12% 15 Вoom 0.10 18% 21% Calculate the expected rates of return, standard deviations, and coefficient of variation for the market and Stock J.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter2: Fundamental Economic Concepts
Section: Chapter Questions
Problem 6E
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The market and Stock J have the following probability distributions:
Economy Forecast
Probability
r.
Bust
0.20
-2%
2%
Below average
0.30
3%
5%
Average
0.25
8%
11%
Above average
0.15
12%
15
Вoom
0.10
18%
21%
Calculate the expected rates of return, standard deviations, and coefficient of variation
for the market and Stock J.
Transcribed Image Text:The market and Stock J have the following probability distributions: Economy Forecast Probability r. Bust 0.20 -2% 2% Below average 0.30 3% 5% Average 0.25 8% 11% Above average 0.15 12% 15 Вoom 0.10 18% 21% Calculate the expected rates of return, standard deviations, and coefficient of variation for the market and Stock J.
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