Question: Q: Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: = 11.5%; rRF = 3.5%; rM = 10.5%.
Q: Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: = 11.5%; rRF = 3.5%; rM = 10.5%. Round your answer to two decimal places.
Q:Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: = 11.5%; rRF = 3.5%; rM = 10.5%. Round your answer to two decimal places.
Q:
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 | (44%) |
| Below average | 0.2 | (12) |
| Average | 0.3 | 15 |
| Above average | 0.3 | 31 |
| Strong | 0.1 | 63 |
| 1.0 |
Assume the risk-free rate is 2%. 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:
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