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Stuart Company's manager believes that economic conditions during the next year will be strong, normal, or weak, and she thinks that the firm's returns will

Stuart Company's manager believes that economic conditions during the next year will be strong, normal, or weak, and she thinks that the firm's returns will have the probability distribution shown below. What's the standard deviation of the estimated returns? (Hint: Use the formula for the standard deviation of a population, not a sample.)

Economic

Conditions

Prob.

Return

Strong

25%

40.0%

Normal

45%

10.0%

Weak

30%

16.0%

Answers:

a.

19.55%

b.

21.55%

c.

17.85%

d.

18.62%

e.

20.68%

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