Question

A stock's returns have the following distribution: Demand for the Probability of this Rate of Return If Company's Products - Demand Occurring This Demand Occurs Week Below average Average Above average Strong standard deviation coefficient variation, and Sharpe ratio. Do not round intermediate calculations. Round your answer to two decimal Assume the rise free rate is 44. Calculate the stock's expected retur places Stock's expected t Standard deviation Conticians of varensioni Sharper

Answer 1

Expected Return = 0.1* - 0.28+ 0.1 * -0.13 + 0.4* 0.11 + 0.3* 0.28 + 0.1*0.63 = 0.15

SD of sample = Under root (X-Mean of X) / n-1

= 0.14

SD of population= Under root (X-Mean of X) / _n

=0.12

Coefficient of Vartion = SD/Mean * 100

0.12/0.15 * 100 = 80

Sharpe ration = Return - R_f / SD = 0.15 - 0.04 / 0.12 = 0.91