Variance and standard deviation (expected). Bacon and Associates, a famous Northwest think tank, has provided probability estimates for the four potential economic states for the coming year in the following table: . The probability of a boom economy is 20%, the probability of a stable growth economy is 40%, the probability of a stagnant economy is 24%, and the probability of a recession is 16%. Calculate the variance and the standard deviation of the three investments: stock, corporate bond, and govermment bond. If the estimates for both the probabilities of the economy and the returms in each state of the economy are corect, which investment would you choose, considering both risk and return? Hint: Make sure to round al intermediate calculations to at least seven (7) decimal places. The input instructions, phrases in parenthesis after each answer bax, What is the variance of tho stock investment? Os (Round to five decimal places.) Forecasted Returns for Each Economy Stable Investment Boom drowth Stagnant Recession - 12% 2% 6% Stock 24% 12% Corporate bond 9% 8% 4% Government bond 8% 7% 5% 3%
Variance and standard deviation (expected). Bacon and Associates, a famous Northwest think tank, has provided probability estimates for the four potential economic states for the coming year in the following table: . The probability of a boom economy is 20%, the probability of a stable growth economy is 40%, the probability of a stagnant economy is 24%, and the probability of a recession is 16%. Calculate the variance and the standard deviation of the three investments: stock, corporate bond, and govermment bond. If the estimates for both the probabilities of the economy and the returms in each state of the economy are corect, which investment would you choose, considering both risk and return? Hint: Make sure to round al intermediate calculations to at least seven (7) decimal places. The input instructions, phrases in parenthesis after each answer bax, What is the variance of tho stock investment? Os (Round to five decimal places.) Forecasted Returns for Each Economy Stable Investment Boom drowth Stagnant Recession - 12% 2% 6% Stock 24% 12% Corporate bond 9% 8% 4% Government bond 8% 7% 5% 3%
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.4: Distributions Of Data
Problem 19PFA
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