What is the standard deviation of the returns on a stock given the following information?
A)1.57 percent
B)2.03 percent
C)2.89 percent
D)3.42 percent
E)4.01 percent

Question

What is the standard deviation of the returns on a stock given the following information? 
A)1.57 percent 
B)2.03 percent 
C)2.89 percent 
D)3.42 percent 
E)4.01 percent

Quizplus · Accepted Answer

E(r) = (0.30 × 0.15) + (0.65 × 0.12) + (0.05 × 0.06) = 0.126Var = 0.30 (0.15 - 0.126)² + 0.65 (0.12 - 0.126)² + 0.05 (0.06 - 0.126)² = 0.000414Std dev = √0.000414 = 2.03 percent

What Is the Standard Deviation of the Returns on a Stock