An analyst believes that economic conditions during the next year will either be strong, normal, or weak, and she thinks that the Corrigan Company's returns will have the following probability distribution. Conditions Probability (%) Return (%) Strong         30                     30 Normal        40                    15 Weak         30                     -10 What is Corrigan’s expected return? What is Corrigan’s standard deviation of returns?

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter9: Forecasting Exchange Rates
Section: Chapter Questions
Problem 6BIC
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.An analyst believes that economic conditions during the next year will either be strong, normal, or weak, and she thinks that the Corrigan Company's returns will have the following probability distribution.

Conditions Probability (%) Return (%)

Strong         30                     30

Normal        40                    15

Weak         30                     -10

What is Corrigan’s expected return?

What is Corrigan’s standard deviation of returns?

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