Based on the following information, what is the standard deviation of returns? State of Economy Probability of State of Economy Rate of Return if State Occurs Recession. 22 -.112 Normal. 25.127 Boom. 53.237

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Mathematics

Keshawn Hart

19 February, 22:51

Based on the following information, what is the standard deviation of returns? State of Economy Probability of State of Economy Rate of Return if State Occurs Recession. 22 -.112 Normal. 25.127 Boom. 53.237

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Corey Hartman · Answer 1

Step-by-step explanation:

Mean = 0.53*23.7% + 0.25*12.7% + 0.22 * (-0.112) = 15.71%

standard deviation = sqrt (0.53 * (23.7%-15.71%) ^2 + 0.25 * (12.7%-15.71%) ^2 + 0.22 * (-0.112-12.40%) ^2) = 8.40%