Calculate the expected rate of return ry for stock


Expected returns

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

Probability X Y
0.1 -15% -22%
0.2 3 0
0.3 15 18
0.2 21 26
0.2 31 36

1.Calculate the expected rate of return, rY, for Stock Y (rX = 14.00%.)

Solution Preview :

Prepared by a verified Expert
Finance Basics: Calculate the expected rate of return ry for stock
Reference No:- TGS0559330

Now Priced at $5 (50% Discount)

Recommended (98%)

Rated (4.3/5)