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probability ABC Returns XYZ Returns 30% 15.00% 30.00% 35% -5.00% 30.00% 25% 30.00% 15.00% 10% 5.00%...

probability ABC Returns XYZ Returns

30% 15.00% 30.00%

35% -5.00% 30.00%

25% 30.00% 15.00%

10% 5.00% 10.00%

what is the standard deviation for stock abc and xyz

SD ABC SD XYZ

Select one:

a. .0062 .55

b. .018818 .00632

c. 15% 13.5%

d. 13.72% 7.95%

Please Solve As soon as
Solve quickly I get you thumbs up directly
Thank's
Abdul-Rahim Taysir

Solutions

Expert Solution

Stock ABC
Scenario Probability Stock return% Expected stock return Mean return Deviation of Mean return and return of stock Square of deviation of mean from stock return Probability *Square of deviation of mean from stock return
1 30.00% 15.00% 4.50% 10.75% 4.25% 0.181%          0.000542
2 35.00% -5.00% -1.75% 10.75% -15.75% 2.481%          0.008682
3 25.00% 30.00% 7.50% 10.75% 19.25% 3.706%          0.009264
4 10.00% 5.00% 0.50% 10.75% -5.75% 0.331%          0.000331
Total 10.75%        0.0188188
Stock A
Expected Return 10.75%
Variance Stock A 1.882%
Std Deviation =Sq Rt of Variance = 13.72%
Stock XYZ
Scenario Probability Stock return% Expected stock return Mean return Deviation of Mean return and return of stock Square of deviation of mean from stock return Probability *Square of deviation of mean from stock return
1 30.00% 30.00% 9.00% 24.25% 5.75% 0.331%          0.000992
2 35.00% 30.00% 10.50% 24.25% 5.75% 0.331%          0.001157
3 25.00% 15.00% 3.75% 24.25% -9.25% 0.856%          0.002139
4 10.00% 10.00% 1.00% 24.25% -14.25% 2.031%          0.002031
Total 24.25%        0.0063188
Stock A
Expected Return 24.25%
Variance Stock A 0.632%
Std Deviation =Sq Rt of Variance = 7.95%
Result Stock ABC Stock XYZ
Std Deviation 13.72% 7.95%
So Option d. is the correct option.

jeff jeffy answered 1 year ago
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