Expected return=Respective return*Respective probability
=(0.25*15)+(0.5*8)+(0.15*4)+(0.1*-3)
=8.05%
Probability | Return | Probability*(Return-Expected Return)^2 |
0.25 | 15 | 0.25*(15-8.05)^2=12.075625 |
0.5 | 8 | 0.5*(8-8.05)^2=0.00125 |
0.15 | 4 | 0.15*(4-8.05)^2=2.460375 |
0.1 | -3 | 0.1*(-3-8.05)^2=12.21025 |
Total=26.7475% |
Standard deviation=[Total Probability*(Return-Expected Return)^2/Total probability]^(1/2)
=(26.7475)^(1/2)
=5.17%(Approx)
Hence the correct option is:
8.05%;5.17%
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