A stock's returns have the following distribution: Demand for the Company's Products Probability of This Demand Occurring
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Question:
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 | (40%) |
Below average | 0.1 | (14) |
Average | 0.4 | 15 |
Above average | 0.3 | 25 |
Strong | 0.1 | 63 |
1.0 |
Assume the risk-free rate is 4%. Calculate the stock's expected return, standard deviation, coefficient of variation, and Sharpe ratio. Do not round intermediate calculations. Round your answers to two decimal places.
Stock's expected return: %
Standard deviation: %
Coefficient of variation:
Sharpe ratio:
Related Book For
Fundamentals of Financial Management
ISBN: 978-1305635937
Concise 9th Edition
Authors: Eugene F. Brigham
Posted Date: