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You have been given this probability distribution for the holding-period return for a stock: State of the Economy Probability HPR Boom 0.40 22% Normal Growth 0.35 11% Recession 0.25 -9% What is the expected standard deviation for the stock closest to if you instead believe that each state of the economy is equally probable? Selected Answer: D. 12.167% Correct Answer: C. 12.832% Question 20 The representative investor's assessment of the probability distribution for the holding-period return for Walmart: State of the Economy Probability Boom 0.40 HPR 30% Normal Growth 0.40 11% Recession 0.20 -10% 0 out of 1 points However, after the FED announcement the investor reassesses that each state is equally probable. What is the expected holding-period return for Walmart stock closest to? Selected Answer: D. 14.4% Correct Answer: A. 10.4% You have been given this probability distribution for the holding-period return for a stock: State of the Economy Probability HPR Boom 0.40 22% Normal Growth 0.35 11% Recession 0.25 -9% What is the expected standard deviation for the stock closest to if you instead believe that each state of the economy is equally probable? Selected Answer: D. 12.167% Correct Answer: C. 12.832% Question 20 The representative investor's assessment of the probability distribution for the holding-period return for Walmart: State of the Economy Probability Boom 0.40 HPR 30% Normal Growth 0.40 11% Recession 0.20 -10% 0 out of 1 points However, after the FED announcement the investor reassesses that each state is equally probable. What is the expected holding-period return for Walmart stock closest to? Selected Answer: D. 14.4% Correct Answer: A. 10.4%
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To calculate the expected standard deviation for the stock we need to consider the weighted average ... View the full answer
Related Book For
Foundations Of Finance
ISBN: 9781292155135
9th Global Edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
Posted Date:
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