State of Economy Bust Boom Probability of State of Economy .50 .50 Security Returns if State Occurs Roll -14% 25 Ross 18% 6 Calculate the standard deviations for Roll and Ross by filling in the following table: (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 4 decimal places.)
State of Economy Bust Boom Probability of State of Economy .50 .50 Security Returns if State Occurs Roll -14% 25 Ross 18% 6 Calculate the standard deviations for Roll and Ross by filling in the following table: (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 4 decimal places.)
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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Question
Transcribed Image Text:State of
Economy
Bust
Boom
State of
Economy
Roll
Bust
Boom
Ross
Bust
Boom
Calculate the standard deviations for Roll and Ross by filling in the following table: (A negative value should be indicated by a minus
sign. Do not round intermediate calculations. Round your answers to 4 decimal places.)
Probability of
State of Economy
Probability
of State of
Economy
.50
.50
.50
.50
.50
.50
Return
Deviation from
Expected
Return
-0.1950
0.2000
Security Returns if
State Occurs
0.0600
-0.0600
Roll
-14%
25
Squared
Return
Deviation
0.0380
0.0380
0² =
Ross
(0.0036)
0.0036
0²=
18%
6
Product
19.5000
0.0600
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