Answered: Problem 10-17 Expected Return Risk… | bartleby

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter12: Capital Structure

Section: Chapter Questions

Problem 5PROB

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Problem 10-17 Expected Return Risk (LG10-1)
Following are three economic states, their likelihoods, and the potential returns:

Economic State Probability Return
Fast growth 0.3 40 %
Slow growth 0.4 10
Recession 0.3 –25
________________________________________

Determine the standard deviation of the expected return. (Do not round intermediate calculations and round your answer to 2 decimal places.)

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