View the step-by-step solution to: The annual returns, in percentages, on stocks A and B for three

This question was answered on Dec 26, 2010. View the Answer
The annual returns, in percentages, on stocks A and B for three possible states of the economy are given in the table below.

Economy State: Good, Probability: 0.5, Stock A: 40 Stock B: 20

Economy State: Average, Probability: 0.3, Stock A: 20 Stock B: 40

Economy State: Bad, Probability: 0.2, Stock A: 10 Stock B: 8

Question: If one invested in StockA, what would be the standard deviation of the percentage return? Place your answer, in percent rounded to 1 decimal place, in the blank. For example, a standard deviation of 10.39 percent would be reported as 10.4. Do not use a percent sign.
Sign up to view the entire interaction

Top Answer

Dear Student, Please find... View the full answer


Calculation of Standard Deviation in percentage return for Stock A Economy
Bad Stock A
10 (y-x) (y-x)² -16.67 277.88
13.37 177.68 Probability

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors and customizable flashcards—available anywhere, anytime.


Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access or to earn money with our Marketplace.

    Browse Documents
  • 890,990,898

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
  • 890,990,898


    Browse existing sets or create your own using our digital flashcard system. A simple yet effective studying tool to help you earn the grade that you want!

    Browse Flashcards