Expected Returns Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone:
|
State of Economy |
Probability of State of Economy |
Security Return If State Occurs |
|
Recession |
0.2 |
8% |
|
Normal |
0.6 |
13 |
|
Boom |
0.2 |
23 |
Standard Deviations Using the information in the previous question, calculate the standard deviation of returns.