Use the following information on states of the economy and stock returns to calc
ID: 2717880 • Letter: U
Question
Use the following information on states of the economy and stock returns to calculate the standard deviation of returns. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Use the following information on states of the economy and stock returns to calculate the standard deviation of returns. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Explanation / Answer
Probability Return Expected 0.3 -6.5 -1.95 0.55 9 4.95 0.15 19 2.85 Expected Return 5.85 Return ® Expected return (ER) Deviation (R-ER) Square of deviation Probability (P) Variance (P*square of deviation) -0.065 0.0585 -0.1235 0.01525225 0.3 0.004575675 0.09 0.0585 0.0315 0.00099225 0.55 0.000545738 0.19 0.0585 0.1315 0.01729225 0.15 0.002593838 Variance 0.00771525 Standard Deviation ( Square root of Variance) 0.39%