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 firm’s beta is 1.5. Which of the following is closest the standard deviation of the stock returns?
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Understanding Basic Statistics
Authors: Charles Henry Brase, Corrinne Pellillo Brase
6th Edition
978-1133525097, 1133525091, 1111827028, 978-1133110316, 1133110312, 978-1111827021
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