firm’s stock has a 0.2 possibility to make 40.00% return, a 0.50 chance to make 10%...

firm’s stock has a 0.2 possibility to make 40.00% return, a 0.50 chance to make 10% return, and a 0.3 possibility to make -10% return. Calculate standard deviation

a. 0.03

b. 0.04

c. 0.05

d. 0.06

Solutions

Expert Solution

I HAVE SOLVED THE QUESTION. I THINK THE QUESTION ASKED SHOULD BE : WHAT IS VARIANCE : ANS (a) 0.03

BECAUSE STANDARD DEVIATION IS NOT COMING FROM ANY OF THE GIVEN VALUES. SO JUST CHECK IT. I AM SURE THAT IT IS ASKING FOR VARIANCE ONLY.

jeff jeffy answered 7 months ago

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