What Is the Expected Return on a Bond If the Return

question 109

Essay

What is the expected return on a bond if the return is 9% two-thirds of the time and 3% one-third of the time? What is the standard deviation of the returns on this bond? Would you prefer this bond or one with an identical expected return and a standard deviation of 4.5? Why?

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Symbols used in writing to clarify meaning by indicating separation of words into sentences, clauses, etc.

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