Ex-Ante Standard Deviation An analyst estimates a 26% probability of a recession next year, a 50% probability of normal economic growth and a 24% probability of a strong recovery. If a recession occurs a stock is projected to have a -16.1% return. With normal growth the stock will generate a 11.1% return and if the strong recovery occurs the stock will have a 26.1% rate of return. This stock's standard deviation is _______.

Multiple Choice

• 15.31%

• 7.63%

• 12.26%

• 12.53%