The Growth Scenario has a Probability of 30% and a Holding Period Return of 32%. The Normal Scenario has a Probability of 50% and a Holding Period Return of 11%. The Recession Scenario has a Probability of 20% and a Holding Period Return of -18%.

What is the standard deviation of the expected Holding Period Return? Show your answer as a percentage rounded to two places (12.34% for example).

The Growth Scenario has a Probability of 30% and a Holding Period Return of 32%. The Normal Scenario has a Probability of 50% and a Holding Period Return of 11%. The Recession Scenario has a Probability of 20% and a Holding Period Return of -18%.

Your boss looks at your analysis and thinks a recession is twice as likely as you think, with that increase equally offset by decreases in the other two categories. By how much does the mean Holding Period Return drop, from your estimates to those of your boss?

Answer rating: 100% (QA)

To calculate the standard deviation of the expected Holding Period Return we need to use the weighte... View the full answer