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Expected returns

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Expected returns

Stocks X and Y have the following probability distributions of expected future returns:

Probability X Y
0.2 -6% -20%
0.2 4 0
0.3 13 21
0.2 19 27
0.1 39 42
  1. Calculate the expected rate of return, rY, for Stock Y (rX = 11.20%.) Round your answer to two decimal places. %
  2. Calculate the standard deviation of expected returns, σX, for Stock X (σY = 19.82%.) Round your answer to two decimal places. %
  3. Now calculate the coefficient of variation for Stock Y. Round your answer to two decimal places. 

Reference no: EM131013829

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