Question
In: Finance
Calculate the expected standard deviation on stock: State of the economy probability of the states percentage...
Calculate the expected standard deviation on stock:
| State of the economy | probability of the states | percentage returns |
| Economic recession | 16% | 5% |
| Steady economy | 39% | 9% |
| Boom | Please calculate it | 18% |
Round the answers to two decimal places in percentage form.
Solutions
Expert Solution
Expected Return = [0.16(0.05) + 0.39(0.09) + 0.45(0.18)]
Expected Return = 0.1241
Standard Deviation = [(0.16(0.05 - 0.1241)2 + 0.39(0.09
- 0.1241)2 + 0.45(0.18 -
0.1241)2]1/2
Standard Deviation = 5.23%
jeff jeffy answered 2 years agoRelated Solutions
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