Question
You are considering investing in stock A, it has the following possible return distribution: State Probability Return on Stock A 1 0.2 11 2 0.1
You are considering investing in stock A, it has the following possible return distribution:
| State | Probability | Return on Stock A |
| 1 | 0.2 | 11 |
| 2 | 0.1 | 14 |
| 3 | 0.3 | 15 |
| 4 | 0.15 | 11 |
| 5 | 0.25 | 12 |
You also know that the firms beta is 1.5. Which of the following is closest the standard deviation of the stock returns?
A. None of these options
b. 3.09
c. 1.76
d. 1.25
e. 2.64
f. 2.5
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Renewable Energy Finance Theory And Practice
Authors: Santosh Raikar, Seabron Adamson
1st Edition
0128164417, 9780128164419
