Probability of This Rate of Return This Demand for the Compa

Probability of This Rate of Return This Demand for the Company\'s Products Weak Below average Average Above average Strong Demand Occurring 0.1 nd Occurs (50%) 16 25 60 04 0.1 1.0 A stock\'s returns have the following distribution as attached. Calculate the stock\'s Coefficient of Variation (CV). (At least four decimal places are needed for your calculation) A) 2.18 B) 2.34

Solution

Average = 11.40%

Standard dev = 26.69%

Ans = 26.69%/11.40% = 2.34

p(x)	return	p*x	p*(x - mean)^2
0.1	-50.0%	-0.05	0.0376996
0.2	-5.0%	-0.01	0.0053792
0.4	16.0%	0.064	0.0008464
0.2	25.00%	0.05	0.0036992
0.1	60.00%	0.06	0.0236196