Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Compute the standard deviation given these four economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast Growth 0.20 100 % Slow

Compute the standard deviation given these four economic states, their likelihoods, and the potential returns:

Economic State Probability Return
Fast Growth 0.20 100 %
Slow Growth 0.50 10 %
Recession 0.20 1 %
Depression 0.10 10 %

a)12.19 percent

b)23.8 percent

c)38.65 percent

d)88.06 percent

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Financial Management

Authors: Geert Bekaert, Robert J. Hodrick

4th International Edition

013284298X, 9780132842983

More Books

Students also viewed these Finance questions