Problem 11-5 Security Returns If State Occurs...

70.2K

Verified Solution

Question

Accounting

Problem 11-5

Security Returns If State Occurs
State of Economy Probability of State of Economy
Roll Ross
Bust .30 11 % 12 %
Boom .70 29 5

Calculate the standard deviations for Roll and Ross by filling in the following table (verify your answer using returns expressed in percentages as well as decimals): (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your Standard deviation answers to 2 decimal places and other answers to 4 decimal places. Omit the "%" sign in your response.)

State of Economy Probability of State of Economy Return Deviation from Expected Return Squared Return Deviation Product
Roll
Bust .30
Boom .70
2 =
Ross
Bust .30
Boom .70
2 =

Standard Deviations
Roll %
Ross %

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students