Question
Use the following information on states of the economy and stock returns to calculate the standard deviation of returns. Note: Do not round intermediate calculations.
Use the following information on states of the economy and stock returns to calculate the standard deviation of returns.
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
| State of Economy | Probability of State of Economy | Security Return if State Occurs |
|---|---|---|
| Recession | 0.40 | 4.50% |
| Normal | 0.25 | 14.00 |
| Boom | 0.35 | 26.00 |
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Financial Management Theory And Practice
Authors: Prasanna Chandra
7th Edition
0070656657, 978-0070656659
