Question 4Consider the following information on two stocks:Stock AStock BP(State)10%25%-5%15%-5%10%25%8%10%-5%5%BoomGrowth 20%Normal 30%20%20%SlowBustCalculate the standard deviation of stock B. (Enter percentages as decimals and round to 4 decimals)

Standard deviation is computed by following formula-Standard deviation = Variance =

Question 4 Consider the following information on two stocks: Stock A Stock B P(State) 10% 25% -5% 15% -5% 25% 10% 5% Boom Growth 20% Normal 30% 20% 20% Slow Bust 10% 8% -5% Calculate the standard deviation of stock B. (Enter percentages as decimals and round to 4 decimals)

Question 4 Consider the following information on two stocks: Stock A Stock B P(State) 10% 25% -5% 15% -5% 25% 10% 5% Boom Growth 20% Normal 30% 20% 20% Slow Bust 10% 8% -5% Calculate the standard deviation of stock B. (Enter percentages as decimals and round to 4 decimals)

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

Problem 1PS

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Step 2: Computation of expected return of stock B.

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Step 3: Computation of standard deviation of stock B.

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