The Garcia Corporation's stock has a 60% probability of experiencing an 15% return, a 30% probability of a 18% return, and a 10% probability of a 14% return. What is the standard deviation of the stock's return?
2.34 %
3.10%
1.77%
1.47%
2.64%
Expected Return = 0.15 * 0.6 + 0.18 * 0.30 + 0.14 * 0.10
= 15.8%
Given Return (X) | Expected Return (X1) | (X-X1)2 | probability | (X-X1)2 * Probability |
0.15 | 0.158 | 0.000064 | 0.60 | 0.0000384 |
0.18 | 0.158 | 0.000484 | 0.30 | 0.0001452 |
0.14 | 0.158 | 0.000324 | 0.10 | 0.0000324 |
Total | 0.000216 |
SD =
= 0.0146969 OR 1.47%
Option D is correct.
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The Garcia Corporation's stock has a 60% probability of experiencing an 15% return, a 30% probability...
The Garcia Corporation's stock has a 50% probability of experiencing an 23% return, a 35% probability of a 19% return, and a 15% probability of a 16% return. What is the standard deviation of the stock's return? 2.34 % 3.10% 1.77% 1.47% 2.64%
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