State of Economy Bust Boom Probability of State of Economy 0.20 0.80 Security Returns if State Occurs Roll -12% 30 Ross 13% 6 Calculate the standard deviations for Roll and Ross by filling in the following table: Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 4 decimal places. State of Probability of State of Return Deviation from Squared Return Product
State of Economy Bust Boom Probability of State of Economy 0.20 0.80 Security Returns if State Occurs Roll -12% 30 Ross 13% 6 Calculate the standard deviations for Roll and Ross by filling in the following table: Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 4 decimal places. State of Probability of State of Return Deviation from Squared Return Product
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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Transcribed Image Text:State of
Economy
Bust
Boom
Probability of
State of Economy
0.20
0.80
Security Returns if
State Occurs
Roll
-12%
30
Ross
13%
6
Calculate the standard deviations for Roll and Ross by filling in the following table:
Note: 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
Probability
of State of
Economy
Return
Deviation from
Expected
Return
Squared
Return
Deviation
Product
Roll
Bust
0.20
Boom
0.80
σ² =
Ross
Bust
0.20
Boom
0.80
-0.0140
0.0002
σ² =
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