Security returns if state occurs state of economy


Security Returns If State Occurs State of Economy Probability of State of Economy Roll Ross Bust .20 –18 % 21 % Boom .80 18 6 Calculate the standard deviations for Roll and Ross by filling in the following table (verify your answer using returns expressed in percentages as well as decimals): (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your Standard deviation answers to 2 decimal places and other answers to 4 decimal places. Omit the "%" sign in your response.) State of Economy Probability of State of Economy Return Deviation from Expected Return Squared Return Deviation Product Roll Bust .20 Boom .80 σ2 = Ross Bust .20 Boom .80 σ2 = Standard Deviations Roll % Ross %

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Financial Management: Security returns if state occurs state of economy
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