What is the standard deviation of returns on the stock


Problem: Distribution of rates of return on stock is as follows:

State of Economy Probability of State Occurring Stock Return %

Depression 0.1 -4.5
Recession   0.2 4.4
Normal       0.5 12.0
Boom         0.2 20.7

a. What is expected return on stock?

b. What is the standard deviation of returns on the stock?

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Finance Basics: What is the standard deviation of returns on the stock
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