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Expected Return

The market and Stock J have the following probability distributions:

Probability rm rj
0.3 15% 20%
0.4 9 5
0.3 18 12

A. Calculate the expected rates of return for the market and Stock J.
B. Calculate the standard deviations for the market and Stock J.
C. Calculate the coefficient of variation for the market and Stock J.
Answer:
A řM = 13.5%; řj = 11.6%
B σM = 3.58%; σJ = 6.22%
C CVM = 0.29; CVj = 0.54.

I am looking for the steps and formula to complete, Thanks

Solution Summary

Word document contains calculations of expected returns , standard deviations and coefficient of variation for the market and stock.

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