Question
Calculating the variance and standard deviation: Barbara is considering investing in a stock and is aware that the return on that investment is particularly sensitive
Calculating the variance and standard deviation: Barbara is considering investing in a stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment. Using the table of returns and probabilities below, find the expected return and the standard deviation of the return on Barbaras investment.
|
| Probability | Return |
| Boom | 0.1 | 25.00% |
| Good | 0.4 | 15.00% |
| Level | 0.3 | 10.00% |
| Slump | 0.2 | -5.00% |
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Managerial Accounting
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
3rd edition
77826485, 978-0077722074, 77722078, 978-0077826482
