The Probabilities of Different Returns on a Stock Over the Year

Essay

The probabilities of different returns on a stock over the year are:
$$\begin{array} { l l } \text { Probability } & \text { Return } \\10 \% & - 5 \% \\15 \% & 0 \% \\20 \% & 5 \% \\30 \% & 10 \% \\25 \% & 20 \%\end{array}$$

a.Calculate the stock's expected return.
a.Expected return = (0.10 × ?5%) + (0.15 × 0%) + (0.20 × 5%) + (0.30 × 10%) + (0.25 ×
b.Calculate the stock's standard deviation.