Compute the Standard Deviation of the Expected Return Given These

question 13

Multiple Choice

Compute the standard deviation of the expected return given these three economic states, their likelihoods, and the potential returns:
$$\begin{array}{l}\begin{array} { c c r } \text { Eccrorric State }&\text { Probability } & \text { Return } \\\text { fast growth }&0.2 & 30 \% \\\text {slow growth }&0.5 & 6\% \\\text { recession }&0.3 & - 2\%\end{array}\end{array}$$

• A) 8.4 percent
• B) 10.87 percent
• C) 11.34 percent
• D) 24.09 percent

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Definitions:

Missing Value

A data point that is not recorded or is absent in a data set or analysis.

Simple Interest

Interest calculated on the principal amount of a loan or deposit without compounding.

Daily Closing Balance

The total amount in an account at the end of each day, taking into account all transactions and activities of that day.

Bank Account

A financial account maintained by a bank or other financial institution in which the financial transactions between a customer and the bank are recorded.