Question: What is the standard deviation on return for a stock that has the following probability distribution: state of the economy probability return (%) boom 0.30

What is the standard deviation on return for a stock that has the following probability distribution:

state of the economy probability return (%)
boom 0.30 18
normal growth 0.50 12
recession 0.20 -5

A) 8.13% B) 9.96% C) 7.04% D) 1.44%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock 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!

Q:

What is the standard deviation on return for a stock that has the following probability distribution: Probability Return (%) 0.30 18 State of the Economy Boom Normal growth Recession 0.50 12 0.20 -5...

Q:

1. Calculate the expected rate of return for a stock which has the following probability distribution of returns Scenario Probability Return Recession 0.4 -5% Normal Economy 0.5 0.1 15% Boom 25% 2....

Q:

Use the following information for Questions 36 - 37: Based on the following information, calculate the expected return and standard deviation for Solo Corp.: State of Probability of Rate of return...

Q:

Based on the following information, calculate the expected return and standard deviation for Solo Corp.: State of Probability of Rate of return Economy State of Economy for Solo Recession -12% Normal...

Q:

What is the standard deviation of the returns on a stock given the following information? State of Economy of Economy Boom .08 Normal .70 Recession .22 8.03% 5.78% 4.59% 3.82% Probability of State...

Q:

15. Going Gone stock is expected to produce the following returns given the various states of the economy. What is the expected return on this stock? Probability of State of Economy .25 State of...

Q:

eBook Expected Returns: Discrete Distribution The market and Stock J have the following probability distributions: Probability 0.3 0.4 0.3 TM 13% 18% 10 5 17 12 a. Calculate the expected rate of...

Q:

Please assist with the assignment attached. Thank you 4) Portfolio Expected Return. You have $10,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 14 percent and...

Q:

Question i and ii Determine the expected return, variance, and standard deviation of the rates of return on stocks U and V: State of economy Recession Normal Boom Probability Stock U Stock V of state...

Q:

Questions #7,8, and CFA problem at bottom of page. Thanks. Problem Set 4 Due: Monday, Oct. 24. 12:00 pm 1) Assume that Ford has a 30 year, 6.5% coupon bond. Given Ford's recent troubles, your broker...

Q:

The renowned Spaniard, Pablo Picasso, was a prolific artist. He created hundreds of paintings and sculptures as well as drawings and sketches numbering in the thousands. (He is said to have settled...

Q:

What is the calculation for the debt ratio? Explain what the debt ratio evaluates.

Q:

Any company with assets of more than $ 1 0 million and at least 5 0 0 shareholders is subject to the reporting requirements of the Securities Exchange Act of 1 9 3 4 . True False

Q:

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".