2. Assume the following interest rates in the below chart. Calculate the expected return variance, and...
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2. Assume the following interest rates in the below chart. Calculate the expected return variance, and standard deviation. If the risk-free return is 4%, what is the risk premium for a stock market investment? Remember your SD will be the rate charged. Possible outcome Probability Return 1 0.2 10% 2 0.5 13% 3 0.3 8% 2. Assume the following interest rates in the below chart. Calculate the expected return variance, and standard deviation. If the risk-free return is 4%, what is the risk premium for a stock market investment? Remember your SD will be the rate charged. Possible outcome Probability Return 1 0.2 10% 2 0.5 13% 3 0.3 8%
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