Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

If the economy is normal, Charleston Freight stock is expected to return 14.3 percent. If the economy falls into a recession, the stock's return is

If the economy is normal, Charleston Freight stock is expected to return 14.3 percent. If the economy falls into a recession, the stock's return is projected at a negative 8.7 percent. The probability of a normal economy is 80 percent. What is the standard deviation of the returns on this stock?

I can get to:

= 0.80 (0.143-0.97)^2 + 0.20 (-0.087 -0.97)^2

^ I feel like I can't do this basic math and get the correct answer! PLease show me the steps!

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

Analysis for Financial Management

Authors: Robert C. Higgins

12th edition

1259918963, 9781260140729 , 978-1259918964

More Books

Students also viewed these Finance questions

Question

Develop a preliminary focus for your research.

Answered: 1 week ago