Calculate the expected return for each stock calculate the, Financial Management

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Calculate the expected return for each stock calculate the

Stocks R and S have the following probability distributions of return:

Returns

Probability Stock R Stock S

0.5 -2% 20%

0.1 10 12

0.4 15 2

a. Calculate the expected return for each stock.

b. Calculate the expected return of a portfolio consisting of 50% of each stock

c. Calculate the standard deviation of returns for each stock and for the portfolio. Which stock is considered riskier with respect to total risk?

d. Compute the coefficient of variation for each stock. According to the coefficient which stock is riskier?

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Financial Management: Calculate the expected return for each stock calculate the

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