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Standard Deviation

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What is the standard deviation of the returns on a stock given the following information?

State of Economy Probability Rate of Return if State Occurs

Boom 10% 16%
Normal 60% 11%
Recession 30% -8%

Choose one answer.

a. 9.15%
b. 9.87%
c. 5.80%
d. 8.38%
e. 7.34%

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The solution explains how to calculate the standard deviation of returns

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