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Security Returns If State Occurs State of Probability of Economy State of Economy Roll Ross Bust .40 10 % 21 % Boom .60 28 8
Security Returns If State Occurs | |||||||||||
State of | Probability of | ||||||||||
Economy | State of Economy | Roll | Ross | ||||||||
Bust | .40 | 10 | % | 21 | % | ||||||
Boom | .60 | 28 | 8 | ||||||||
Calculate the standard deviations for Roll and Ross by filling in the following table (verify your answer using returns expressed in percentages as well as decimals): (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your Standard deviation answers to 2 decimal places and other answers to 4 decimal places. Omit the "%" sign in your response.) |
State of Economy | Probability of State of Economy | Return Deviation from Expected Return | Squared Return Deviation | Product | ||||||||
Roll | ||||||||||||
Bust | .40 | |||||||||||
Boom | .60 | |||||||||||
2 = | ||||||||||||
Ross | ||||||||||||
Bust | .40 | |||||||||||
Boom | .60 | |||||||||||
2 = | ||||||||||||
Standard Deviations | |
Roll | % |
Ross | % |
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