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    Discrete Distribution: Calculating Expected Return, Standard Deviation and CV

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    A stock's return has the following distribution:

    Demand for the Probability of This Rate of Rate of Return if This Company's Products Demand Occurring Demand Occurs

    Weak 0.1 (50%)
    Below average 0.2 (5)
    Average 0.4 16
    Above average 0.2 25
    Strong 0.1 60
    1.0

    Calculate the stock's expected return, standard deviation, and coefficient of variation.

    © BrainMass Inc. brainmass.com June 3, 2020, 11:52 pm ad1c9bdddf
    https://brainmass.com/business/accounting/discrete-distribution-calculating-expected-return-standard-deviation-and-cv-304461

    Solution Preview

    Please refer attached file for complete solution. Formulas typed with the help of equation writer are missing here.

    Demand Probability of demand Return Mean
    P X P*X X-Mean ...

    Solution Summary

    This solution describes the steps to calculate expected value, standard deviation and coefficient of variation for the given distribution of return.

    $2.19

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