# Calculating expected return, standard deviation and CV

A stock's returns have the following distribution:

Demand for the Company's Products - Probability of this Demand Occurring - Rate of Return If This 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.

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#### Solution Preview

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

Solution:

Demand Probability of demand Return Mean

P X P*X X-Mean (X-Mean)^2 ...

#### Solution Summary

Solution describes the methodology to calculate expected return, standard deviation and coefficient of variation in the given case.

$2.19