The following data represent the probability distribution of the holding period returns for an investment in Lazy Rapids Kayaks (LARK) stock.   State of the Economy Scenario #(s) Probability, p(s) HPR Boom 1 0.348 31.60% Normal growth 2 0.432 6.90% Recession 3 0.220 -19.20%     a. What is the expected return on LARK? (Round your answer to 2 decimal places.)   b. What is the standard deviation of the returns on LARK? (Round your answer to 2 decimal places.)

Managerial Accounting
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ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
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The following data represent the probability distribution of the holding period returns for an investment in Lazy Rapids Kayaks (LARK) stock.

 

State of the Economy Scenario #(s) Probability, p(s) HPR
Boom 1 0.348 31.60%
Normal growth 2 0.432 6.90%
Recession 3 0.220 -19.20%
 

 

a. What is the expected return on LARK? (Round your answer to 2 decimal places.)

 

b. What is the standard deviation of the returns on LARK? (Round your answer to 2 decimal places.)

 

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