HELP another Personal Finance Question?

Question

The expected return and standard deviation of returns for asset A are (See below.) Calculate the expected return and standard deviation of asset A.

Asset A

Possible Outcomes Probability Returns (%)

Pessimistic 0.25 5

Most likely 0.55 10

Optimistic 0.20 13

and another question

What is the cost of retained earnings if a firm has a beta of 1.2, the market return equals 14 percent, and the risk-free rate equals 6 percent?

Answer 1

ER = (.25 x 5)+ (.55 x 10) + (.20 x 13) = 9.35

Std Deviation

R1 R R1-R (R1-R)2 Pr1 (R1-R)... x Pr1

5% 10% -5% 0.25% 25 6.25%

10% 10% 0% 0.00% 55 0.00%

13% 10% 3% 0.09% 20 1.80%

8.05%



Std Deviation = √8.05% = 28.37% 28.37%



Cost of RE = Cost of Equity = (Beta x Market Return) + Risk Free Return

= (1.2 x 14%) + 6%

= 22.8%



I just researched my answer & I'm not sure if my application is correct.  Just to give you an idea.  I did it in Spreadsheet and copy paste it here that's why is a little bit squabbled.  Accounting is really my field not so much in Finance.