Stuart Company's management believes that economic conditions during the next year will be strong, normal, or weak,
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Question:
Stuart Company's management believes that economic conditions during the next year will be strong, normal, or weak, and she thinks that the firm's returns will have the probability distribution shown below. What's the standard deviation of the estimated returns?
(Hint: Use the formula for the standard deviation of a population, not a sample.)
Economic
Conditions Prob. Return
Strong 25% 32.0%
Normal 45% 10.0%
Weak 30% −16.0%
Related Book For
Intermediate Financial Management
ISBN: 978-1285850030
12th edition
Authors: Eugene F. Brigham, Phillip R. Daves
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