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Expected Returns Problem

The market and Stock J have the following probability distributions:

Probability rM r3
0.3 15% 19%
0.4 8 4
0.3 20 11

a) calculate the expected rat of return for the market. round to two decimal places.____________%

calculate the expected rate of return for Stock J. round to two decimal places.___________%

b) calculate the standard deviation for the market. round to two decimal places.____________%

calculate the standard deviation for the market. round to two decimal places.____________%

c) calculate the coefficient of variation for the market. round to two decimal places.______________%

calculate the coefficient of variation for Stock J. round to two decimal places.___________%

_____________________
I'm not sure if I worked these correct, my answers are:

a) 43%
34%

b) 6.03%
7.51%

c) 42.05
66.23

Solution Summary

The solution answers Expected Returns Problem.

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