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What Is the Standard Deviation of the Returns on a Share

Question 72

Multiple Choice

What is the standard deviation of the returns on a share given the following information?
 State of Economy  Probability of State of Economy  Rate of Return if StateOccurs  Boom 10%16% Normal 60%11% Recession 30%8%\begin{array}{|l|l|l|}\hline \text { State of Economy } & \text { Probability of State of Economy } & \text { Rate of Return if StateOccurs } \\\hline \text { Boom } & 10 \% & 16 \% \\\hline \text { Normal } & 60 \% & 11 \% \\\hline \text { Recession } & 30 \% & -8 \% \\\hline\end{array}


A) 5.80%
B) 7.34%
C) 8.38%
D) 9.15%
E) 9.87%

Correct Answer:

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