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Given the following information about a stock's return in the various states of the economy, calculate the standard deviation of its return. State of economy
Given the following information about a stock's return in the various states of the economy, calculate the standard deviation of its return.
| State of economy | Probability | Stock return |
|---|---|---|
| Recession | 0.18 | -0.24 |
| Normal | 0.42 | 0.07 |
| Boom | -- | 0.21 |
Enter answer in percents, accurate to two decimal places.
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Public Finance and Public Policy
Authors: Jonathan Gruber
4th edition
1429278455, 978-1429278454
