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Calculating expected return and standard deviation

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An analyst believes that the economic conditions during the next year will either be Strong, Normal or Weak and she thinks that the Simpson Company's returns will have the following probability distribution. What's the standard deviation of Simpson's returns as estimated by this analyst?

PROBABILITY RETURN

STRONG 30% 24%
NORMAL 40% 15%
WEAK 30% -10%.

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Solution:

Economic conditions Probability Return
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Solution Summary

Solution describes the steps to calculate expected returns and standard deviation of returns.

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