Westover Stock Is Expected to Return 36 Percent in a Boom,14

question 27

Multiple Choice

Westover stock is expected to return 36 percent in a boom,14 percent in a normal economy,and lose 75 percent in a recession.The probabilities of a boom,normal economy,and a recession are 2 percent,93 percent,and 5 percent,respectively.What is the standard deviation of the returns on this stock?

• A)19.90 percent
• B)20.52 percent
• C)20.41 percent
• D)18.79 percent
• E)19.74 percent

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