Calculate the standard deviation of the expected dollar returns for Ditto Copier Center,given the following distribution of returns:
A) $36.0
B) $23.0
C) $18.0
D) $13.0
E) $30.0

Question

Calculate the standard deviation of the expected dollar returns for Ditto Copier Center,given the following distribution of returns: 
A) $36.0 
B) $23.0 
C) $18.0 
D) $13.0 
E) $30.0

Quizplus · Accepted Answer

To calculate the standard deviation, we need the variance first. We can calculate the variance using the formula:

Variance = Σ [(return - expected return)^2 * probability]

Using the provided distribution, we get:
Variance = (0.2 * (15 - 10)^2) + (0.5 * (5 - 10)^2) + (0.3 * (-5 - 10)^2) = 150

Then, the standard deviation is simply the square root of the variance:
Standard deviation = sqrt(150) = $23.0

Therefore, the best choice is B.

Calculate the Standard Deviation of the Expected Dollar Returns for Ditto