Using the following information for an M2 Group Limited share,calculate their expected return and standard deviation.
State Probability Return
Boom 20% 40%
Normal 60% 15%
Recession 20% (20%)

Question

Quizplus · Accepted Answer

The Answer is Ki = Ki = = (.20)(40%)+ (.60)(15%)+ (.20)(-20%) = 8% + 9% - 4% = 13% σi = ( ). σi = ((40% - 13%)2(.2)+ (15% - 13%)2 (.6)+ (-20% - 13%)2 (.2)).= 19.13%

= (.20)(40%)+ (.60)(15%)+ (.20)(-20%)
= 8% + 9% - 4% = 13%
σi = ( Ki = = (.20)(40%)+ (.60)(15%)+ (.20)(-20%) = 8% + 9% - 4% = 13% σi = ( ). σi = ((40% - 13%)2(.2)+ (15% - 13%)2 (.6)+ (-20% - 13%)2 (.2)).= 19.13%

).
σi = ((40% - 13%)2(.2)+ (15% - 13%)2 (.6)+ (-20% - 13%)2 (.2)).= 19.13%

Using the Following Information for an M2 Group Limited Share,calculate