Question: Quantitative Problem: You are given the following probability distribution for CHC Enterprises: State of Economy Probability Rate of return Strong 0.20 18% Normal 0.50 9%

 Quantitative Problem: You are given the following probability distribution for CHCEnterprises: State of Economy Probability Rate of return Strong 0.20 18% Normal

Quantitative Problem: You are given the following probability distribution for CHC Enterprises: State of Economy Probability Rate of return Strong 0.20 18% Normal 0.50 9% Weak 0.30 -6% What is the stock's expected return? Do not round intermediate calculations. Round your answer to two decimal places. % What is the stock's standard deviation? Do not round intermediate calculations. Round your answer to two decimal places. % What is the stock's coefficient of variation? Do not round intermediate calculations. Round your answer to two decimal places. Quantitative Problem: You are given the following information for Wine and Cork Enterprises (WCE): TRF = 2%; r = 8%; RPM = 6%, and beta = 1.1 What is WCE's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. RSS Fee 8.6 % If inflation increases by 1% but there is no change in investors' risk aversion, what is WCE's required rate of return now? Do not round intermediate calculations. Round your answer to two decimal places. % Assume now that there is no change in inflation, but risk aversion increases by 2%. What is WCE's required rate of return now? Do not round intermediate calculations. Round your answer to two decimal places. % If inflation increases by 1% and risk aversion increases by 2%, what is WCE's required rate of return now? Do not round intermediate calculations. Round your answer to two decimal places. %

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