Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What is the expected standard deviation of stock A's returns based on the information presented in the table? Outcome Probability of outcome Stock A return

What is the expected standard deviation of stock A's returns based on the information presented in the table?

Outcome Probability of outcome Stock A return in outcome
Good 19% 75.00%
Medium 54% 13.00%
Bad "?" -41.00%

32.31% (plus or minus 0.02 percentage points)

38.86% (plus or minus 0.02 percentage points)

31.02% (plus or minus 0.02 percentage points)

37.59% (plus or minus 0.02 percentage points)

The expected standard deviation can not be estimated because the probability of the bad outcome is not given or the standard deviation can be computed from the given information, but none of the above is within 0.10 percentage points of the correct answer

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

Campaign Finance Reform

Authors: Melissa M. Smith, Glenda C. Williams, Larry Powell, Gary A. Copeland

1st Edition

0739145657, 978-0739145654

More Books

Students also viewed these Finance questions

Question

b. Where did they come from?

Answered: 1 week ago