Stocks A and B have the following probability distributions of expected future returns:

Probability	A		B
0.1	(12	%)	(30	%)
0.2	2		0
0.4	16		18
0.2	23		26
0.1	36		37

1. Calculate the expected rate of return, , for Stock B ( = 13.80%.) Do not round intermediate calculations. Round your answer to two decimal places.

  %

1. Calculate the standard deviation of expected returns, σ_A, for Stock A (σ_B = 17.89%.) Do not round intermediate calculations. Round your answer to two decimal places.

  %

Now calculate the coefficient of variation for Stock B. Do not round intermediate calculations. Round your answer to two decimal places.

Answer rating: 100% (QA)

To calculate the expected rate of return for Stock B we need to multiply each return value by its co... View the full answer