Use the following information on states of the economy and stock returns to calc

Question

Use the following information on states of the economy and stock returns to calculate the standard deviation of returns. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

I know the answer is not 9.62%

Use the following information on states of the economy and stock returns to calculate the standard deviation of returns. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Explanation / Answer

Variance

Standared deviation =10.05%

  State of   Economy Probability Security Return E(RA)   Recession 0.35 -7.50% -2.6%   Normal 0.2 8% 1.6%   Boom 0.45 15% 6.8% expected returns 5.7%

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