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