Question 3 Assume that the market returns are normally distributed with 10% mean and 20% standard deviation. The probability that the market return will be between -10% and 30% will be approximately 95% 68% 50% 25%

Expected Returns: Discrete Distribution The market and Stock J have the following probability distributions: Probability rM rJ 0.3 15% 20% 0.4 9 7 0.3 18 10 Calculate the expected rates of return for the market and Stock J. Round your answers to one decimal place. Expected rate of return (Market): % Expected rate of return (Stock J): % Calculate the standard deviations for the market and Stock J. Do not round intermediate calculations. Round your answers to two decimal places. Standard deviation (Market): % Standard deviation (Stock J): %

Given the following probability distribution, compute for Outcome Probability Expected Return 20% 10% 2 60% 15% 3 20% 20% 1. the expected return a. 10% b. 12% С. 15% d. 20% 2. Standard deviation of returns а. 5.50% b. 6.18% C. 3.16% d. 10.00%

Q. Market rate of return is 18%, risk-free rate of return 8% and beta is 1.2 1. Calculate the required rate of return 2. Calculate risk premium