Following are three economic states, their likelihoods, and the potential returns: Probability Return 0.25 35% Economic State Fast growth Slow growth Recession 2 -18 0.45 0.30 Determine the standard deviation of the expected return. (Do not round intermediate calculations. decimal places.)

Financial Management: Theory & Practice
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ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter7: Corporate Valuation And Stock Valuation
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Problem 10-18 Expected Return Risk (LG10-1)
Following are three economic states, their likelihoods, and the potential returns:
Return
35%
Economic State
Fast growth
Slow growth
Recession
2
-18
Probability
0.25
0.45
0.30
Determine the standard deviation of the expected return. (Do not round intermediate calculations and round your answer to 2
decimal places.)
Standard deviation
%
Transcribed Image Text:Problem 10-18 Expected Return Risk (LG10-1) Following are three economic states, their likelihoods, and the potential returns: Return 35% Economic State Fast growth Slow growth Recession 2 -18 Probability 0.25 0.45 0.30 Determine the standard deviation of the expected return. (Do not round intermediate calculations and round your answer to 2 decimal places.) Standard deviation %
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