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Use the following information on states of the economy and stock returns to calculate the expected return and the standard deviation of returns. Assume that all three states are equally likely. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. State of Economy Recession Normal Boom Security Return if State Occurs -10.00% 15.00 21.00 Expected return Standard deviation % %

Use the following information on states of the economy and stock returns to calculate the expected return and the standard deviation of returns. Assume that all three states are equally likely. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. State of Economy Recession Normal Boom Security Return if State Occurs -10.00% 15.00 21.00 Expected return Standard deviation % %

Essentials Of Investments
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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Use the following information on states of the economy and stock returns to calculate the expected return and the standard deviation of returns. Assume that all three states are equally likely. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. State of Economy Recession Normal Boom Security Return if State Occurs -10.00% 15.00 21.00 Expected return Standard deviation % %
Transcribed Image Text:Use the following information on states of the economy and stock returns to calculate the expected return and the standard deviation of returns. Assume that all three states are equally likely. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. State of Economy Recession Normal Boom Security Return if State Occurs -10.00% 15.00 21.00 Expected return Standard deviation % %
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