Consider the following probability distribution for stocks A and B: The standard deviations of stocks A and B are _____ and _____, respectively.
A)1.5%; 1.9%
B)2.5%; 1.1%
C)3.2%; 2.0%
D)1.5%; 1.1%

Question

Consider the following probability distribution for stocks A and B:  The standard deviations of stocks A and B are _____ and _____, respectively.
A)1.5%; 1.9% 
B)2.5%; 1.1% 
C)3.2%; 2.0% 
D)1.5%; 1.1%

Quizplus · Accepted Answer

s_A = [0.1(10% - 13.2%)² + 0.2(13% - 13.2%)² + 0.2(12% - 13.2%)² + 0.3(14% - 13.2%)² + 0.2(15% - 13.2%)²]^1/2 = 1.5%; s_B = [0.1(8% - 7.7%)² + 0.2(7% - 7.7%)² + 0.2(6% - 7.7%)² + 0.3(9% - 7.7%)² + 0.2(8% - 7.7%)²]^1/2 = 1.1%.

Consider the Following Probability Distribution for Stocks a and B