A stock is expected to earn 10.0% over the next year with a 40% probability and 3.0%otherwise. What is the standard deviation of returns based on this scenario analysis?Answer in percent, rounded to one decimal place.

Market Condition Probability Return on A 1 40% 10% 2 60% 3% To Find: Standard Deviation

Answered: A stock is expected to earn 10.0% over…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 17P

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A stock is expected to earn 10.0% over the next year with a 40% probability and 3.0% otherwise. What is the standard deviation of returns based on this scenario analysis? Answer in percent, rounded to one decimal place.