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Stocks X and Y have the following probability distributions of expected future returns:
Probability | X | Y |
0.1 | -10% | -25% |
0.3 | 6 | 0 |
0.3 | 13 | 24 |
0.2 | 21 | 29 |
0.1 | 37 | 47 |
a.) Calculate the expected rate of return, rY, for Stock Y (rX = 12.60%.) Round your answer to two decimal places.
b.) Calculate the standard deviation of expected returns, ?X, for Stock X (?Y = 19.83%.) Round your answer to two decimal places.
c.) Now calculate the coefficient of variation for Stock Y. Round your answer to two decimal places.
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