Question: A stock has an expected return over the next year of 1 0 % . You believe that it is equally likely that the stock's

A stock has an expected return over the next year of 10%. You believe that it is equally likely that the stock's actual return will be either 15 percentage points lower or higher than this expected return, and that these returns both have a 30% chance of occurring. The stock also has a 40% chance of obtaining a return exactly equal to its 10% expected value. What is the standard deviation of this stock? Answer: 11.6%(.116)

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