Assignment:
An analyst has developed the following probability distribution of the rate of return for a common stock.
| Scenario |
Probability |
Rate of Return |
| 1 |
0.3 |
-5% |
| 2 |
0.45 |
0% |
| 3 |
0.25 |
10% |
a. Calculate the expected rate of return.
b. Calculate the variance and standard deviation of this probability distribution.
Provide complete and step by step solution for the question and show calculations and use formulas.