Question: Expected Return: Discrete Distribution A stock's return has the following distribution: Demand for the Company's Products Probability of This Demand Occurring Rate of Return if

Expected Return: Discrete Distribution

A stock's return has the following distribution:

Demand for the Company's Products Probability of This Demand Occurring Rate of Return if This Demand Occurs (%)
Weak 0.1 -25 %
Below average 0.2 -6
Average 0.4 14
Above average 0.2 25
Strong 0.1 75
1.0

Calculate the stock's expected return. Round your answer to two decimal places.

%

Calculate the standard deviation. Do not round intermediate calculations. Round your answer to two decimal places.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!