Sandra is considering investing in a company's stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment. Probability Return Boom 0.4 25.00% Good 0.2 15.00% Level 0.1 10.00% Slump 0.3 -5.00% Use the table of returns and probabilities above to determine the expected return on Sandra’s investment? (Round answer to 3 decimal places, e.g. 0.076.) Probability Return Expected return Boom 0.4 25.00% 10.000% Good 0.2 15.00% 3.000% Level 0.1 10.00% 1.000% Slump 0.3 -5.00% -1.500% Expected return 12.500% Use the table of returns and probabilities above to determine the standard deviation of the return on Sandra's investment? (Round answer to 5 decimal places, e.g. 0.07680.) Standard deviation enter the standard deviation rounded to 5 decimal places
Sandra is considering investing in a company's stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment.
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Return |
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Boom |
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0.4 |
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25.00% |
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Good |
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0.2 |
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15.00% |
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Level |
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0.1 |
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10.00% |
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Slump |
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0.3 |
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-5.00% |
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Use the table of returns and probabilities above to determine the expected return on Sandra’s investment? (Round answer to 3 decimal places, e.g. 0.076.)
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Probability |
Return |
Expected return |
|
Boom |
0.4 |
25.00% |
10.000% |
|
Good |
0.2 |
15.00% |
3.000% |
|
Level |
0.1 |
10.00% |
1.000% |
|
Slump |
0.3 |
-5.00% |
-1.500% |
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Expected return |
12.500% |
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Use the table of returns and probabilities above to determine the standard deviation of the return on Sandra's investment? (Round answer to 5 decimal places, e.g. 0.07680.)
| Standard deviation | enter the standard deviation rounded to 5 decimal places |
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