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Calculate the expected rate of return for stock b

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Reference no: EM132719488

Probability A B0.1 3 0

0.1 (9%) (23%)

0.5 12 19

0.2 24 27

0.1 38 47

Problem a. Calculate the expected rate of return, , for Stock B ( = 14.00%.) Do not round intermediate calculations. Round your answer to two decimal places.

Problem b. Calculate the standard deviation of expected returns, σA, for Stock A (σB = 17.34%.) Do not round intermediate calculations. Round your answer to two decimal places.

Problem c. Assume the risk-free rate is 1.5%. What are the Sharpe ratios for Stocks A and B? Do not round intermediate calculations. Round your answers to four decimal places.

Stock A

Stock B

Reference no: EM132719488

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