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Calculating standard deviation, variance and expected return

State of Economy - Probability - Smith Stores Returns

Depression .05 -50%
Recession .10 -15%
Mild Slowdown .20 5%
Normal .30 15%
Broad Expansion .20 25%
Strong Expansion .15 40%

1. The variance and standard deviation of the Smith Stores returns are:
(A) 428.75; 20.71
(B) 71.46; 8.45
(C) 939.58; 30.65
(D) 1127.50; 33.58

2. The expected return on Smith Stores is:
(A) 20.5
(B) 12.5
(C) 8.5
(D) 3.3

Solution Preview

Please refer attached file for complete solution. Formulas printed with the help of equation writer are missing here.

Solution:

Probability Returns
P R P*R (R-Mean Return)^2 ...

Solution Summary

The solution describes the formula and methodology for calculating variance, standard deviation and expected returns for Smith Stores.

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