Calculate the expected return and standard deviationof returns for asset A are (See below.)
Possible Outcomes Probability Returns (%)
Pessimistic 0.25 5
Most likely 0.55 10
Optimistic 0.20 13
The expected return for A is
E(A) = 0.25*5% + 0.55*10% + 0.20*13% …
Expected return and standard deviation of returns are calculated. The solution is detailed and well presented. The response received a rating of “5/5” from the student who originally posted the question.