Calculating standard deviation, variance and expected return
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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
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Solution Summary
The solution describes the formula and methodology for calculating variance, standard deviation and expected returns for Smith Stores.
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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 ...
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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