Question
Mary wants to purchase the Share X, with has the following probabilities. Calculate the expected return from Share X. State of the world Probability Return
Mary wants to purchase the Share X, with has the following probabilities. Calculate the expected return from Share X. State of the world Probability Return Boom 0.1 25.00% Poor Good 0.4 15% Luke warm Level 0.3 10% Slump 0.2 -5% Calculating the variance and standard deviation: Ling Ying is considering investing in a share, and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment. Using the table of returns and probabilities below, find the expected return and the standard deviation of the return on Ling Yings investment.
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