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    Calculating Expected Return from a Stock's Distribution

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    A stock's return has the following distributions:

    Demand for the Probability of Rate of Return
    Company's This Demand If This
    Products Occuring Demand Occurs

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

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

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    Solution Preview

    Please refer to the EXCEL for calculation
    expected return = ...

    Solution Summary

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