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.