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 the Economy
|
Security Return if State Occurs
|
|
Recession
|
.30
|
-8%
|
|
Normal
|
.40
|
13
|
|
Boom
|
.30
|
23
|
Using the information in the previous question, calculate the standard deviation of returns.