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There are three states of the economy: Low, Medium, and High, with probabilities 25%(Low), 50% (Medium), and 25%(High). A bond fund has returns 8% in

There are three states of the economy: Low, Medium, and High, with probabilities 25%(Low), 50% (Medium), and 25%(High). A bond fund has returns 8% in Low, 5% in Medium, and 2% in High. What is the standard deviation of the bond fund's returns?

A. 4.5%

B. .00045%

C. 2.12%

D. 3.97%

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Question

There are three states of the economy: Low, Medium, and High, with probabilities 25%(Low), 50% (Medium), and 25%(High). A bond fund has returns 8% in

There are three states of the economy: Low, Medium, and High, with probabilities 25%(Low), 50% (Medium), and 25%(High). A bond fund has returns 8% in Low, 5% in Medium, and 2% in High. What is the standard deviation of the bond fund's returns? A. 4.5% B. .00045% C. 2.12% D. 3.97%

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There are three states of the economy: Low, Medium, and High, with probabilities 25%(Low), 50% (Medium), and 25%(High). A bond fund has returns 8% in Low, 5% in Medium, and 2% in High. What is the standard deviation of the bond fund's returns?

A. 4.5%

B. .00045%

C. 2.12%

D. 3.97%