XYZ Corp has a 30% chance to earn 12% returns,a 40% chance for 18% returns,and a 30% chance to earn 15% returns.What is the standard deviation?
A) 2.49%
B) 15.3%
C) 4.24%
D) 15%
E) 5.62%

Question

Quizplus · Accepted Answer

Step 1 - Compute the expected return. Expected return = E(k) = Pr₁k₁ + Pr₂k₂ + ... + Pr_nk_n Expected return = .3 × 12% + .3 × 15% + .4 × 18%Expected return = 15.3% Step 2 - Use the expected return to calculate the standard deviation. Standard deviation = 11ea7fdb_fc12_3b76_a768_8994b647311b_TB2902_11 Standard deviation = 11ea7fdb_fc12_3b77_a768_4f3b690e6590_TB2902_11 Standard deviation = 2.49%

XYZ Corp Has a 30% Chance to Earn 12% Returns,a