The market and Stock J have the following probability distributions: Probability rM rJ
0.3 14% 22%
0.4 10 4
0.3 19 12
1. Calculate the expected rate of return for the market. Round your answer to two decimal places.%
2. Calculate the expected rate of return for Stock J. Round your answer to two decimal places.%
3. Calculate the standard deviation for the market. Round your answer to two decimal places.%
4. Calculate the standard deviation for Stock J. Round your answer to two decimal places.%

1)

2)

3)

And the variance would be given by:

And the deviation would be:

4)

And the variance would be given by:

And the deviation would be:

Step-by-step explanation:

For this case we have the following distributions given:

Probability  M   J

0.3           14%  22%

0.4           10%    4%

0.3           19%    12%

Part 1

The expected value is given by this formula:

And replacing we got:

Part 2

Part 3

We can calculate the second moment first with the following formula:

And the variance would be given by:

And the deviation would be:

Part 4

We can calculate the second moment first with the following formula:

And the variance would be given by:

And the deviation would be:

step-by-step explanation:

step-by-step explanation:

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