Purchase Solution

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
1.0

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

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.

Solution Preview

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

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