Stuart Company's manager believes that economic conditions during the next year will be strong, normal, or weak, and she thinks that the firm's returns will have the probability distribution shown below. What's the standard deviation of the estimated returns? (Hint: Use the formula for the standard deviation of a population, not a sample.) Economic Conditions Strong Normal Weak 17.69% 18.62% 19.55% 20.52% 21.55% Prob. 30% 40% 30% Return 32.0% 10.0% -16.0%

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Stuart Company's manager believes that economic conditions during the next year will be
strong, normal, or weak, and she thinks that the firm's returns will have the probability
distribution shown below. What's the standard deviation of the estimated returns? (Hint: Use
the formula for the standard deviation of a population, not a sample.)
Economic
Conditions
Strong
Normal
Weak
17.69%
18.62%
19.55%
20.52%
21.55%
Prob.
30%
40%
30%
Return
32.0%
10.0%
-16.0%
Transcribed Image Text:Stuart Company's manager believes that economic conditions during the next year will be strong, normal, or weak, and she thinks that the firm's returns will have the probability distribution shown below. What's the standard deviation of the estimated returns? (Hint: Use the formula for the standard deviation of a population, not a sample.) Economic Conditions Strong Normal Weak 17.69% 18.62% 19.55% 20.52% 21.55% Prob. 30% 40% 30% Return 32.0% 10.0% -16.0%
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