Use the following information on states of the economy and stock returns to calc
ID: 2718071 • 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.)
I know the answer is not 9.62%
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
Variance
Standared deviation =10.05%
State of Economy Probability Security Return E(RA) Recession 0.35 -7.50% -2.6% Normal 0.2 8% 1.6% Boom 0.45 15% 6.8% expected returns 5.7%