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The economy has a 10 percent chance of booming 60 percent chance of being normal and 30 percent chance of going into a recession A stock is expected to return 16 percent in a boom

The economy has a 10 percent chance of booming, 60 percent chance of being normal, and 30 percent chance of going into a recession. A stock is expected to return 16 percent in a boom, 11 percent in a normal, and lose 8 percent in a recession. What is the standard deviation of the returns?

5.80%

7.34%

8.38%

9.15%

9.87%

 

Apr 08 2020 Read more Less More

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