Barbara is considering investing in a stock and is aware that the return on that

Question

Barbara is considering investing in a stock and is aware that the return on  that investment is particularly sensitive to how the economy is performing.  Her analysis suggests that four states of the economy can affect the return on  the investment. Using the table of returns and probabilities below, find

What is the expected return on Barbara%u2019s investment? (Round  answer to 3 decimal places, e.g. 0.076.)

What is the standard deviation of the return on Barbara's investment? (Round  intermediate calculations and answer to 5 decimal places, e.g. 0.07680.)

Barbara is considering investing in a stock and is aware that the return on  that investment is particularly sensitive to how the economy is performing.  Her analysis suggests that four states of the economy can affect the return on  the investment. Using the table of returns and probabilities below, find

Probability Return Boom 0.2 25.00% Good 0.3 15.00% Level 0.2 10.00% Slump 0.3 -5.00% Barbara is considering investing in a stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment. Using the table of returns and probabilities below, find What is the expected return on Barbara%u2019s investment? What is the standard deviation of the return on Barbara's investment?

Explanation / Answer

Expected return= 10%

Standard Deviation = 5.91608%

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