You have estimated the following probability distributions of expected future returns for Stocks X and...
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You have estimated the following probability distributions of expected future returns for Stocks X and Y:
| Stock X | Stock Y | ||||||
| Probability | Return | Probability | Return | ||||
| 0.1 | -10 | % | 0.2 | 2 | % | ||
| 0.1 | 9 | 0.3 | 8 | ||||
| 0.4 | 16 | 0.2 | 11 | ||||
| 0.2 | 25 | 0.1 | 14 | ||||
| 0.2 | 40 | 0.2 | 25 | ||||
What is the expected rate of return for Stock X? Stock Y? Round your answers to one decimal place. Stock X: %
Stock Y: %
What is the standard deviation of expected returns for Stock X? For Stock Y? Round your answers to two decimal places. Stock X: %
Stock Y: %
- Which stock would you consider to be riskier? -Select-Stock XStock YItem 5 is riskier because it has a -Select-higherlowerItem 6 standard deviation of returns.
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