Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The economy next year will be in three possible scenarios with equal probabilities: Boom, Normal, and Recession. The common stock of Escapist Films will earn

The economy next year will be in three possible scenarios with equal probabilities: Boom, Normal, and Recession. The common stock of Escapist Films will earn -28% in Boom, 8% in Normal, and 48% in Recession. What is the standard deviation of the stocks return?

a. 7.89%

b. 31.04%

c. 9.64%

d.16.52%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Finance A Focused Approach

Authors: Michael C. Ehrhardt, Eugene F. Brigham

8th Edition

0357714636, 9780357714638

Students also viewed these Finance questions

Question

Describe various competitive compensation policies.

Answered: 1 week ago