Question
Use the following table to compute the standard deviation of return given the following scenario analysis for the stock market of a developing country A.
Use the following table to compute the standard deviation of return given the following scenario analysis for the stock market of a developing country A. Which choice comes closest to the standard deviation? (Use 3 decimal points in the intermediate steps).
| A | B | C | D | E | F |
| Scenario | Probability | Expected Return in each scenario(%) | B * C | Deviation from the mean | B*Squared Deviation |
| Recession | 0.2 | -35% |
|
|
|
| Normal | 0.7 | 5% |
|
|
|
| Boom | 0.1 | 17% |
|
|
|
|
|
| Average= |
| Variance= |
|
|
|
|
|
| Standard Deviation= |
|
39%
15%
8.5%
36.5%
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Financial Management For Public Health And Not-for-Profit Organizations
Authors: Steven A. Finkler, Daniel L. Smith, Thad D. Calabrese, Robert M. Purtell
7th Edition
1071835335, 978-1071835333
