Answered: Suppose an investment is equally likely…

Suppose an investment is equally likely to have a 37.9% return or a -20% return. The total volatility of returns is closest to: a. 28.95% b. 8.38% c. 20.47% d. 40.94%

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 3PROB

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Question

Suppose an investment is equally likely to have a 37.9% return or a -20% return. The total volatility of returns is closest to:
a. 28.95%
b. 8.38%
c. 20.47%
d. 40.94%

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