You have been given this probability distribution for the holding- period return for Cheese, Inc stock: State of the economy Probability HPR Boom 0.20 24% Normal Growth 0.45 15% Recession 0.

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You have been given this probability distribution for the holding- period return for Cheese, Inc stock: State of the economy Probability HPR Boom 0.20 24% Normal Growth 0.45 15% Recession 0.35 8% Assuming that the expected return on Cheese's stock is 14.35%, what is the standard deviation of these returns?

5.74%

4.72%

4.38%

6.67%

6.30%

Giải thích

Chọn đáp án A

Giải thích: Variance =0.20 × (24 - 14.35)^2 + 0.45 × (15 - 14.35)^2 + 0.35 × (8 - 14.35)^2 = 32.9275

Standard deviation = 32.9275^1/2 = 5.74.*SD = Square root of variance