What is the standard deviation of a security which has the following expected returns?

A) 7.48 percent
B) 7.61 percent
C) 7.67 percent
D) 7.82 percent
E) 7.91 percent

Question

What is the standard deviation of a security which has the following expected returns?

A) 7.48 percent 
B) 7.61 percent 
C) 7.67 percent 
D) 7.82 percent 
E) 7.91 percent

Quizplus · Accepted Answer

E(R) = (0.10 × 19) + (0.75 × 13) + (0.15 × -7) = 10.6 Var = 0.10(19 - 10.6)² + 0.75(13 - 10.6)² + 0.15(-7 - 10.6)² = 57.84 Std Dev = √57.84 = 7.61 percent

What Is the Standard Deviation of a Security Which Has