Consider the following probability distribution for stocks A and B: The standard deviations of stocks A and B are _____ and _____, respectively.
A)1.56%; 1.99%
B)2.45%; 1.66%
C)3.22%; 2.01%
D)1.54%; 1.11%

Question

Consider the following probability distribution for stocks A and B:  The standard deviations of stocks A and B are _____ and _____, respectively.
A)1.56%; 1.99% 
B)2.45%; 1.66% 
C)3.22%; 2.01% 
D)1.54%; 1.11%

Quizplus · Accepted Answer

s_A = [0.15(8% - 13%)² + 0.2(13% - 13%)² + 0.15(12% - 13%)² + 0.3(14% - 13%)² + 0.2(16% - 13%)²]^1/2 = 2.449%; s_B = [0.15(8% - 8.4%)² + 0.2(7% - 8.4%)² + 0.15(6% - 8.4%)² + 0.3(9% - 8.4%)² + 0.2(11% - 8.4%)²]^1/2 = 1.655%.

Consider the Following Probability Distribution for Stocks a and B