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Security Returns if State Occurs State of Probability of Economy State of Economy Roll Bust -11% Boom 22 0.40 0.60 Ross 15% 5 Calculate

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Security Returns if State Occurs State of Probability of Economy State of Economy Roll Bust -11% Boom 22 0.40 0.60 Ross 15% 5 Calculate the standard deviations for Roll and Ross by filling in the following table: Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 4 decimal places. Answer is complete but not entirely correct. Probability State of Economy of State of Economy Return Deviation from Expected Return Squared Return Deviation Product Roll Bust 0.40 -11.0000 X 392.0400X 156.8160 X Boom 0.60 13.2000 x 174.2400x 104.5440x = 16.1666 Ross Bust Boom 0.40 0.60 6.0000 X -0.0400 36.0000 X 0.0016 = 14.4000 x 9.6000x 4.8990 Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Answer is complete but not entirely correct. Standard Deviations Roll Ross 9.74 % 6.55 x %

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