Question
In: Finance
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 2 years agoRelated Solutions
probability ABC Returns XYZ Returns 30% 15.00% 30.00% 35% -5.00% 30.00% 25% 30.00% 15.00% 10% 5.00%...
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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%
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