The market and Stock J have the following probability distributions: Probability rM rJ 0.3 16% 22% 0.4 8 7 0.3 20 12 a. Calculate the expected rate of return...

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Finance

The market and Stock J have the following probabilitydistributions:

Probability

rM

rJ

0.3

16%

22%

0.4

8

7

0.3

20

12

a. Calculate the expected rate of return for the market. Roundyour answer to two decimal places.

a1. Calculate the expected rate of return for Stock J. Roundyour answer to two decimal place

b. Calculate the standard deviation for the market. Do not roundintermediate calculations. Round your answer to two decimalplaces.

b2. Calculate the standard deviation for Stock J. Do not roundintermediate calculations. Round your answer to two decimalplaces

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Transcribed Image Text

The market and Stock J have the following probabilitydistributions:ProbabilityrMrJ0.316%22%0.4870.32012a. Calculate the expected rate of return for the market. Roundyour answer to two decimal places.a1. Calculate the expected rate of return for Stock J. Roundyour answer to two decimal placeb. Calculate the standard deviation for the market. Do not roundintermediate calculations. Round your answer to two decimalplaces.b2. Calculate the standard deviation for Stock J. Do not roundintermediate calculations. Round your answer to two decimalplaces

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