Problem 11-6 Calculating Returns and Standard Deviations

Based on the following information:

State of Economy	Probability of State of Economy	Rate of Return if State Occurs
Depression	.15	.110
Recession	.20	.054
Normal	.49	.125
Boom	.16	.206

Calculate the expected return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return

%

Calculate the standard deviation. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Standard deviation

%

References

eBook & Resources

WorksheetDifficulty: 1 Basic

Problem 11-6 Calculating Returns and Standard Deviations