Question

Question 211 pts

Given the data below, compute the standard deviation for stock A. Enter your answer in percentages rounded off to two decimal points.Do not enter % in the answer box.

Event	Probability	Returns
Pessimistic	25%	13%
Most Likely	50%	15%
Optimistic	25%	17%

Answer 1

Step-1:Calculation of variance for Stock A
	Even	Probability	Returns	Expected Return	Variance
		a	b	c=a*b	d=((b-15.00%)^2)*a
	Pessimistic	25%	13%	3.25%	0.0100%
	Most Likely	50%	15%	7.50%	0.0000%
	Optimistic	25%	17%	4.25%	0.0100%
	Total			15.00%	0.0200%
Step-2:Calculation of standard deviation
	Standard deviation		=	Variance^(1/2)
			=	0.0002	^ (1/2)
			=	1.41%
Thus,
	Standard deviation of stock A is			1.41%