Problem: What is the standard deviation of the returns on a stock given the following information?
State of Economy Probability Rate of Return if State Occurs
Boom 10% 16%
Normal 60% 11%
Recession 30% -8%
Choose one answer.
a. 9.15%
b. 9.87%
c. 5.80%
d. 8.38%
e. 7.34%