Exhibit 7.13
Use the Information Below for the Following Problem(S)
A financial analyst covering Magnum Oil has determined the following four possible returns given four different states of the economy over the next period.
$$\begin{array} { c c }
\text { Prabability } & \text { Return } \
\hline0 .10& - .20 \
0 .25 & - .05 \
0 .4 [ & 0 .15 \
0.25 & 0.30
\end{array}$$
-Refer to Exhibit 7.13.Calculate the standard deviation for Magnum Oil.
A) 0%
B) 11%
C) 16%
D) 20%
E) 26%

Question

Exhibit 7.13
Use the Information Below for the Following Problem(S)
A financial analyst covering Magnum Oil has determined the following four possible returns given four different states of the economy over the next period.
 $$\begin{array} { c c } 
\text { Prabability } & \text { Return } \
\hline0 .10& - .20 \
0 .25 & - .05 \
0 .4 [ & 0 .15 \
0.25 & 0.30
\end{array}$$
-Refer to Exhibit 7.13.Calculate the standard deviation for Magnum Oil.
A) 0%
B) 11%
C) 16%
D) 20%
E) 26%

Quizplus · Accepted Answer

$$\begin{aligned}
& \sqrt { .1 ( - 0.2 - 0.1025 ) ^ { 2 } + .25 ( - 0.05 - 0.1025 ) ^ { 2 } + .4 ( 0.15 - 0.1025 ) ^ { 2 } + .25 ( 0.3 - 0.1025 ) ^ { 2 } } \
= & \sqrt { .1 ( 0.09151 ) + .25 ( 0.02326 ) + .4 ( 0.00226 ) + .25 ( .03901 ) } \
= & \sqrt { .00915 + .00582 + .00090 + .00975 } \
= & \sqrt { 0.02562 } = 0.1601
\end{aligned}$$

Exhibit 713 Use the Information Below for the Following Problem(S) a

Exhibit 713
Use the Information Below for the Following Problem(S)
a