Question

You anticipate that an investment has a 30% chance of earning a 20% return, a 40%...

You anticipate that an investment has a 30% chance of earning a 20% return, a 40% chance of earning a 5% return, and a 30% chance of earning 12%. What is the standard deviation of this investment?  Answer in percent form to two decimal places.

Homework Answers

Answer #1

Ans 6.22

 Probability (P) RETURN (Y) (P * Y ) P * (Y -Average Return of Y)^2 30% 20 6.00 21.17 40% 5 2.00 17.42 30% 12 3.60 0.05 TOTAL 11.60 38.64 Expected Return = (P * Y) 11.60% VARIANCE = P * (Y -Average Return of Y)^2 38.6400 Standard Deviation = Square root of (P * (Y -Average Return of Y)^2) Square root of 38.64 6.22
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

ADVERTISEMENT