Compute the Standard Deviation Given These Four Economic States, Their

question 52

Multiple Choice

Compute the standard deviation given these four economic states, their likelihoods, and the potential returns: Economic State
Probability
Return
Fast Growth
0) 40
50%
Slow Growth
0) 40
10%
Recession
0) 10
-10%
Depression
0) 10
-5%

• A)6.71 percent
• B)22.5 percent
• C)23.37 percent
• D)52.20 percent

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Definitions:

Variance

A measure of the variability of scores about a mean; the mean of the sum of squared deviations of scores from the group mean.

Regression Equation

A mathematical representation of the relationship between a dependent variable and one or more independent variables.

Constant

A value that does not change in mathematical expressions or scientific experiments, contrasted with variables which can vary.

Slope

A measure of the steepness or incline of a line, representing the rate of change of a variable.