Question
Consider the following probability distributions for stocks A and B: State Probability Return on A Return on B 1 .3 7% -9% 2 .5 11%
Consider the following probability distributions for stocks A and B:
| State | Probability | Return on A | Return on B |
| 1 | .3 | 7% | -9% |
| 2 | .5 | 11% | 14% |
| 3 | .2 | -16% | 26% |
a) What is the standard deviation of returns for stock A? Please give your answer in percent rounded to the nearest basis point.
b) What is the standard deviation of returns for stock B? Please give your answer in percent rounded to the nearest basis point.
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
