Question
Using the below data, calculate the expected return, variance and standard deviation for Company B shares in the table below for different states of the
Using the below data, calculate the expected return, variance and standard deviation for Company B shares in the table below for different states of the economy. (4 +7+ 4 marks)
| State of the economy | Probability | Company B |
| Boom | 35% | 22% |
| Expansion | 40% | 15% |
| Recession | 25% | -13% |
Answer 5: [Answer and show workings here]
Expected Return: =
|
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Variance: =
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Standard Deviation: =
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
13th International Edition
1265533199, 978-1265533199
