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The following probability distributions of returns for two stocks have been estimated: Probability; Stock A; Stock B 0.3;...

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Finance

The following probability distributions of returns for twostocks have been estimated:

Probability; Stock A; Stock B

0.3; 12%; 5%

0.4; 8; 4

0.3; 6; 3

What is the coefficient of variation for the stock that is lessrisky (assuming you use the coefficient of variation to rankriskiness).

3.62

0.28

0.66

5.16

0.19

Answer & Explanation Solved by verified expert
3.6 Ratings (393 Votes)
Stock AProbability PReturnPReturnDeviation form expected return    See Answer
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The following probability distributions of returns for twostocks have been estimated:Probability; Stock A; Stock B0.3; 12%; 5%0.4; 8; 40.3; 6; 3What is the coefficient of variation for the stock that is lessrisky (assuming you use the coefficient of variation to rankriskiness).3.620.280.665.160.19

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