Question: An analyst has estimated how a particular stock's return will vary depending on what will happen to the economy: State of Probability of Stock's Expected

An analyst has estimated 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 population standard deviation to calculate the coefficient of variation.)

a.

2.121

b.

2.201

c.

2.472

d.

3.334

e.

3.727

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