Question: Question 2 The following table relates to Stock XYs return: Demand for Company XYs products Probability of this demand occurring Rate of return if this

Question 2

The following table relates to Stock XYs return:

Demand for Company XYs products	Probability of this demand occurring	Rate of return if this demand occurs
Weak	0.13	(45%)
Below average	0.17	(8%)
Average	0.37	14%
Above average	0.19	22%
Strong	0.14	50%
	1.0

Required:

Calculate Stock XYs expected return, standard deviation, and coefficient of variation. (10 marks)

(b) ABC Co. currently maintains a relatively high amount of cash. Explain TWO (2) reasons why the company might do this. If you are the assistant financial controller of this company, how would you advise the company to minimize its cash holdings? Briefly discuss THREE (3) ways in which this can be done. (15

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