Question
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 | 30% | 32.0% |
| Normal | 40% | 10.0% |
| Weak | 30% | 16.0% |
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Handbook Of Financial Intermediation And Banking
Authors: Anjan V. Thakor, Arnoud Boot
1st Edition
0444515585, 978-0444515582
