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Coefficient of variation

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Trying to figure out how a particular stock's return will vary depending on what will happen to the economy:

State of Probability of Stock's Expected Return
the Economy State Occurring if this State Occurs
Recession 0.10 -60%
Below Average 0.20 -10
Average 0.40 15
Above Average 0.20 40
Boom 0.10 90

What is the coefficient of variation on the company's stock?
(Use the expected rate of return and the population standard deviation to calculate the coefficient of variation. Please show all calculations.

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Solution Summary

This solution provides a detailed step by step explanation of the given finance problem.

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Coefficient of variation = standard deviation/expected return

Expected return = Sum (Probability X associated return)
Expected return = 0.1X-60% ...

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