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Expected Return: Discrete Distribution A stock's return has the following distribution: Demand for the Company's Products Probability of This Demand...

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Finance

Expected Return: Discrete Distribution

A stock's return has the following distribution:

Demand for the
Company's Products		Probability of This
Demand Occurring		Rate of Return if This
Demand Occurs (%)
Weak0.1-35%
Below average0.2-5
Average0.418
Above average0.230
Strong0.170
1.0

Calculate the stock’s expected return and standard deviation. Donot round intermediate calculations. Round your answers to twodecimal places.

Expected return:   %

Standard deviation:   %

Answer & Explanation Solved by verified expert
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StateProbability PReturnPReturnDeviation form expected    See Answer
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Transcribed Image Text

Expected Return: Discrete DistributionA stock's return has the following distribution:Demand for theCompany's ProductsProbability of ThisDemand OccurringRate of Return if ThisDemand Occurs (%)Weak0.1-35%Below average0.2-5Average0.418Above average0.230Strong0.1701.0Calculate the stock’s expected return and standard deviation. Donot round intermediate calculations. Round your answers to twodecimal places.Expected return:   %Standard deviation:   %

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