The probability of either a booming economy or a


A portfolio is expected to return 16 percent in a booming economy, 12 percent in a normal economy, and -22 percent in a recessionary economy. The probability of either a booming economy or a recessionary economy is 5 percent each. What is the standard deviation of these expected returns?

A. 7.51 percent
B. 7.67 percent
C. 8.04 percent
D. 8.23 percent
E. 8.54 percent

 

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Finance Basics: The probability of either a booming economy or a
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