What is the standard deviation of an investment that has the following expected scenario?18% probability of a recession, 2.0% return; 65% probability of a moderate economy, 9.5%return; 17% probability of a strong economy, 14.2% return.

A) 3.68%

B) 1.23%

C) 8.47%

D) 6.66%

Answer:A

Diff: 2

Topic:7.1 Realized and Expected Rates of Return and RiskKeywords:standard deviationPrinciples:Principle 2: There Is a Risk-Return Tradeof