11.6

Security Returns If State Occurs
State of Economy	Probability of State of Economy
Roll	Ross
Bust	.50	19	%	12	%
Boom	.50	19		5

Calculate the standard deviations for Roll and Ross by filling in the following table (verify your answer using returns expressed in percentages as well as decimals): (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your Standard deviation answers to 2 decimal places and other answers to 4 decimal places. Omit the "%" sign in your response.)

State of Economy	Probability of State of Economy	Return Deviation from Expected Return	Squared Return Deviation	Product
Roll
Bust	.50
Boom	.50
			2 =
Ross
Bust	.50
Boom	.50
			2 =

	Standard Deviations
Roll	%
Ross	%