Question: Stock ABC has three possible returns in the next week: -10% (Probability: 40%), 0% (probability: 20%), 15% (probability: 40%). What is the variance of ABC?

Stock ABC has three possible returns in the next week: -10% (Probability: 40%), 0% (probability: 20%), 15% (probability: 40%). What is the variance of ABC?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

To calculate the variance of the returns for Stock ABC we first need to find the expected ret... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!