Intro You've estimated the following expected returns for a stock, depending on the strength of the economy: State (s) Probability Expected return Recession -0.02 Normal Expansion Part 1 What is the expected return for the stock? 3+ decimals Submit 0.2 0.5 0.3 3+ decimals Part 2 What is the standard deviation of returns for the stock? Submit 0.09 0.14

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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## Intro

You've estimated the following expected returns for a stock, depending on the strength of the economy:

| State (s)   | Probability | Expected return |
|-------------|-------------|-----------------|
| Recession   | 0.2         | -0.02           |
| Normal      | 0.5         | 0.09            |
| Expansion   | 0.3         | 0.14            |

## Part 1

**What is the expected return for the stock?**

*Input box for entering the expected return, requiring at least 3 decimal places.*

[Submit Button]

## Part 2

**What is the standard deviation of returns for the stock?**

*Input box for entering the standard deviation, requiring at least 3 decimal places.*

[Submit Button]
Transcribed Image Text:## Intro You've estimated the following expected returns for a stock, depending on the strength of the economy: | State (s) | Probability | Expected return | |-------------|-------------|-----------------| | Recession | 0.2 | -0.02 | | Normal | 0.5 | 0.09 | | Expansion | 0.3 | 0.14 | ## Part 1 **What is the expected return for the stock?** *Input box for entering the expected return, requiring at least 3 decimal places.* [Submit Button] ## Part 2 **What is the standard deviation of returns for the stock?** *Input box for entering the standard deviation, requiring at least 3 decimal places.* [Submit Button]
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