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Expected Return: Discrete Distribution

πŸ“… October 29, 2025 ✍️ Edu Essay ⏱ 1 min read

Expected Return: Discrete DistributionA stock’s return has the following distribution:Demand for theCompany’s ProductsProbability of ThisDemand OccurringRate of Return if ThisDemand Occurs (%)Weak0.1-45%Below average0.2-8Average0.414Above average0.235Strong0.1701.0Calculate the stock’s expected return. Round your answer to two decimal places.%Calculate the standard deviation. Round your answer to two decimal places.%Suppose rRF = 3%, rM = 10%, and rA = 12%.Calculate Stock A’s beta. Round your answer to two decimal places. If Stock A’s beta were 1.9, then what would be A’s new required rate of return? Round your answer to two decimal places. %

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